What you need to consider before changing super funds
If you are unhappy with your superannuation fund or want different services and features, you are free to move to a different superannuation fund.
The good news is that it isn't complicated to move superannuation funds.
You can contact the new fund directly and fill out an 'superannuation standard choice' form. Or you can change funds via your myGov account through the ATO or download a rollover form from the ATO.
You need personal details such as your tax file number and your employer's ABN if you are working. If you are switching to a self-managed superannuation fund, you need the fund ABN, name, address and the fund bank account.
But before you change funds, do your homework on the fund you are leaving and the new fund to be sure you are making the right move. Look at:
Performance
Examine the funds' performance over the medium to long term.
Don't change funds because your superannuation fund performed poorly in a single year. Instead judge its performance over five years or more, explains Moneysmart, the consumer arm of the regulator, Australian Securities and Investments Commission (ASIC). It says if you are chasing last year's top-performing fund, it may not perform as well in coming years.
Fees
Moneysmart recommends comparing fund fees as well as how often the fees are charged. There can be a long list of fees and one place to look is the fund's product disclosure statement (PDS) under fees for the following.
Administration fees are typically made up of a flat monthly or annual fee plus a percentage of total assets.
Intra-fund and personal financial advice fees.
Investment fees vary depending on the investment options with cash usually being the cheapest. Other investment fees include the buy/sell spread, the transaction fees and the cost of switching investments.
Insurance costs and cover for life and total and permanent disability (TPD) insurance as well as income protection - also known as salary continuance insurance - can vary quite a bit between funds.
Insurance
Check your insurance before changing super funds. If you have a pre-existing medical condition or are over age 60, you may not be able to get the cover you want from the new fund, explains Moneysmart. Read the fine print in the terms and conditions.
Superannuation funds regularly change their insurance arrangements and costs, depending on their claims experience. So, it is worth checking on your insurance every year to see if there are changes to your cover.
Compare your fund tools
The ATO offers a YourSuper comparison tool to compare superannuation funds ranked by fees and net returns that is updated quarterly. It allows you to select and compare in more detail up to four MySuper products at a time. The information is supplied by the Australian Prudential Regulation Authority (APRA). The ATO says everyone's situation is different and recommends that people seek independent financial advice when they change funds.
There are non-government super comparison websites too that offer some free information as well as more detailed information for a fee. They include:
Some people can't change funds
There are some fund members who can't switch superannuation funds and choose their own fund. These include temporary residents and people covered by an enterprise agreement or workplace determination made before January 1, 2021.
Change funds via the ATO
Moneysmart says if you only have one super fund and want to change, you can do this easily online through the ATO:
- go to my.gov.au
- log in or create an account
- link your myGov account to the ATO
- select 'Super' and then 'Manage'
- select 'Transfer super' (this option will only appear if you have more than one super account)
This will show you all your super accounts and let you transfer your balance from one to another.
If you go through the ATO, a separate electronic request is sent to each transferring super fund, explains the tax office. They generally take three days to send your request electronically to your nominated super fund.
Some super funds may contact you to verify the information provided or to seek further information before processing the request for transfer.
The tax office points out that you can only transfer a full super account balance from one super fund to another using its online services. Partial transfers can't be done online.
If you wish to transfer a part of your super account balance from one super fund to another, contact the super fund you wish to transfer money from.
Once you selected your new fund, you can make a choice about how you want your superannuation invested or you can opt for the default MySuper option which is usually the balanced investment option. If you are eligible, you may be given some basic insurance cover which you may like to increase at an additional cost. It is crucial to nominate a beneficiary for the money in your fund when you die so that your choice receives your super.
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