Q. My son isn’t happy with his super fund. How hard is it to change funds?
A. Hi Craig. While super in Australia is mandatory, most people can choose which super fund they want to join.
These days, changing funds is very easy. All you need to do is become a member with your chosen fund (most funds let you do this online in minutes), then ask your employer to pay your future super contributions into your new account.
Changing funds is also a good time to think about consolidating your super to save fees and make keeping track of your super easier. This means rolling over your existing account balance and any other super you have into your new account.
Things to consider
While the process for changing super funds is simple, there are some things to consider before proceeding
Fees can have a big impact on your final super balance. As a rule, lower is always better. Some funds also charge exits fees when you change funds, though these fees will be banned from 1 July 2019.
2. Investment options
Most super funds offer differentinvestment options to suit different investment goals. Make sure your chosen fund offers an option that suits your individual needs and risk tolerance.
Super is a long-term investment. As a guide, look for a fund with good returns over five years or more — not just the last one or two.
Make sure your new fund offers the same (or comparable) cover as your old fund. Be particularly careful if you have a pre-existing medical condition or are aged 60 or over as there may be additional requirements to get or transfer cover. If in doubt, get financial advice.
5. A fund that works for you
Know what kind of fund you’re joining. For example, MTAA Super is an Industry Super Fund. That means we exist solely for our members. We keep our fees low and all profits go back into the fund to benefit our members. This is very different from a bank-owned retail super fund that pays dividends to shareholders. Whatever super fund you choose, never forget that your super will play a big part in shaping your retirement. So, choose a fund that always has your best interest at heart.