Having a ‘job for life’ is mostly a thing of the past. Many Australians will change jobs a number of times during their career, and in doing so, may end up with multiple super funds. This could mean you end up paying multiple sets of fees that chip away at your retirement savings. Your super is your money, and you have a choice of where your super is paid, even when you change jobs.
Keeping your super on track
Starting a new job involves a lot of change - a new workplace, new colleagues, a new role to learn - so it’s little wonder that people often forget to organise their super and just go with the new employer’s default option. In fact, changing jobs is likely to be the main reason that many Australians have more than one super fund. Of the 15.6 million Australians with super, 39% have more than one super account1.
Unfortunately, this can mean more fees and more paperwork. By taking the time to understand your options, you can help to keep your super on track to a comfortable retirement. This is what you need to know:
What happens to my super when I change jobs?
If you change jobs, it doesn’t mean you have to change your super fund. In most cases, if you already have a super fund that you would like to stick with, you can. Once you start your new job, your new employer has 28 days to give you a standard choice form. You simply need to fill out the details of your existing fund on the form, and your new employer will pay your super contributions to it.
If you don’t make a choice, your employer will pay your contributions into their default fund. That means you’ll have at least two super accounts, with no new contributions going into your current fund.
Research your new company’s super fund
If you don’t yet have a fund or want to change funds, it pays to know your options and do your research. Find out about your new company’s super fund to see if it’s right for you. Be sure to take into account considerations such as the investment options, the performance of the investment options, the level of risk you’re comfortable with, the fees and any available insurance options. You can look further afield and select a fund separate to your new employer’s default fund if you prefer. If you don’t nominate an investment option, chances are your super will be paid into your employer’s default fund, with your super invested in a default MySuper account.
What is MySuper?
Many retail, industry and corporate super funds now offer a new type of investment option called MySuper - a government initiative for simple, cost-effective default super options for Australian employees. It is a default investment option for those who don’t select a super fund when they start a new job.
Funds that provide MySuper investment options must either have a single diversified investment strategy or, alternatively, a lifecycle investment approach. Single diversified investment strategies invest your money into a standard mix of investments and the level of risk stays the same each year. Lifecycle options move your money from more growth investments when you are young to more conservative investments as you increase in age and are closer to retiring.
What happens to my insurance cover?
It's important to understand how changing super funds may impact your insurance benefits. For example, you may lose your automatic insurance cover if your super fund no longer receives employer contributions or there may be changes to your insurance premiums. Before making any changes, it’s a good idea to compare the cover provided by your current fund versus your employer’s fund, as well as the premiums you’ll pay from your super account. There may also be eligibility requirements or age limits that apply to obtaining insurance cover or default cover. Be sure to understand what’s involved so you don’t get caught out without cover.
Remember to review your super
Changing jobs can be a timely reminder to review your super investment options to make sure they’re still appropriate for you. This is a good idea regardless of whether you’re sticking with your existing super fund or moving to a new one. It may also be a good time to consider consolidating your super, as having one super account can mean less fees and less paperwork, making it easy to keep track of your money.
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Products in the Super Directions Fund and the Wealth Personal Superannuation and Pension Fund are issued by N.M. Superannuation Proprietary Limited (N.M. Super) ABN 31 008 428 322 (trustee), which is part of the AMP group (AMP). Before deciding what’s right for you, it’s important to consider your particular circumstances and read the relevant Product Disclosure Statement or Terms and Conditions available from AMP at amp.com.au or by calling 131 267. Read AMP’s Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.
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