Changing Super Funds: A Guide to Making the Switch
Superannuation is an essential part of building a secure financial future for yourself. Your superannuation fund is essentially a retirement savings account that your employer contributes to on your behalf. It’s important to regularly review your superannuation fund to ensure that you are getting the most out of it. This may involve changing super funds. In this post, we’ll explore the process of switching super funds and the things to consider when making the change.
How to change super funds?
The process of just changing super funds is relatively straight forward. However, ensuring you’ve chosen the right fund and options within your new fund isn’t. That’s why we’ve developed this step guide so that you can make the switch with confidence.
Step 1: Review your current fund before changing super funds
Before making any changes, take the time to review your current superannuation fund. Evaluate its fees, investment options, performance, insurance coverage and customer reviews. Assess whether it aligns with your financial goals and compare it to industry benchmarks. You can do all this on Review My Super on our superannuation funds page. Click on the ‘more info’ button on your fund from the list and you will find all the information on the fund for your evaluation.
This evaluation will help you understand if changing super funds is the right move for you.
Step 2: Compare super funds and benchmarks
Compare your current fund against industry benchmarks and other superannuation funds. Look for funds that offer competitive fees, a diverse range of investment options, and strong historical performance.
You can do this on Review My Super once on the relevant funds page by following the instructions in step 1 and then clicking on the relevant investment option from the dropdown under the ‘choose investment option’ heading. When you select an investment option the table will display the performance of this option over 1, 3 and 5 years as well as the difference between this options performance and the median performance of super fund investment options of the same risk category.
Beneath this you can also see the fees for the selected option and how the funds are invested via its underlying asset allocation. Be sure to only compare options that suit your risk tolerance.
If insurance cover such as life, TPD and income protection is relevant to you then you should check out the funds insurance score at the bottom of the page and compare cover of the top insurers that can be funded via superannuation. In many cases these insurers will rank better than the default cover in superfunds. They have the added benefit of being portable, meaning you can take them with you if you change super funds again.
At the bottom of the page you can also see reviews of the fund by customers. Other people’s experience can give you another perspective by providing an insight into how the fund serves their customers.
This information should help you to make an informed decision based on your specific needs and preferences.
Step 3: Understand how to change super funds
Once you have decided on a new fund, it’s time to understand the process of changing super funds. The process of changing super funds has two broad steps; application with your chosen fund and transfer of funds.
In most cases the best way to do your application is online or over the phone with the fund you want to join. They want your business so they will try and make the process of switching to them as easy as they can. As part of the application they will be able to transfer your existing super fund. The reverse is true if you ask your current fund to roll you out to a new fund.
Alternaively, you can complete the application form in the funds PDS and an ATO rollover form to transfer the funds.
Step 4: Complete the application to change super funds
Complete the application process for your new superannuation fund. Fill out the necessary forms accurately, providing your personal information, tax file number, and desired investment options. Take your time to ensure all details are correct and complete before submitting the application.
Remember to enter your chosen investment option from your research in step 2 otherwise, they will put you in their default option which may not be suited to your needs.
In the insurance section of the application you will have the option of accepting their default cover, choosing a different amount or selecting no cover. If during your analysis in step 2 you’ve found a better insurer than the one your new fund offers then select no cover and separately complete an application with your chosen insurer.
You can do this through Review My Super by clicking the ‘’Apply” button next to the insurer in our insurance quote comparison tool.
An important consideration when applying for insurance cover that is underwritten and thus might take some time to be approved is to be careful not to cancel off your existing cover until your new cover is in force. To avoid being uninsured for any time, a trick that most financial advisers use is to initially only rollover some of the funds, keeping a small balance in your existing fund which keeps your insurance cover in place while the new application is in progress. Once the new cover is approved you can initiate the full rollover.
Step 5: Notify your employer about the super fund change
It’s crucial to inform your employer about the change in your super fund. Provide them with the relevant details, such as the new fund’s name, product identifier, and account number. This will ensure that future contributions are directed to the correct fund. Most funds will have a one page super choice form that you should receive as part of the application process, this will have all the relevant information for your employer on there. Alternatively, you can complete the ATO Standard Choice form and get the ABN and USI from the funds page on Review My Super on the heading ‘Fund Information’ beneath the insurance score.
Review Your Fund Annually
It’s important to review your superannuation fund annually to ensure it continues to meet your needs and goals. This doesn’t mean changing your fund every year it just means keeping an eye on it to make sure performance isn’t deteriorating, it’s still invested according to your risk profile, fees haven’t increased, and the insurance coverage is still suited to your needs. Sometimes a small tweak may be necessary and other times a major strategy change may be in order. By regularly monitoring your fund you can avoid the lazy tax that so many Australians pay on their retirement savings.
Help with Changing Super Funds
If you’re unsure about changing super funds or have questions about the process, seek professional advice from a financial advisor. They can provide tailored guidance to help you navigate the process and help achieve your financial goals. The team here at Review My Super are eager to help. Get in touch with us today.
Super funds are no longer allowed to charge exit fees. However, some funds will charge buy/sell spreads. These are essentially transaction costs for moving in and out of investment options. There may also be tax implications for changing out of some types of funds such as wrap accounts and Self Managed Super Funds. If you’re unsure if this is applicable to you then you should seek professional advice.
Risks may include loss of benefits, such as insurance coverage, and potential tax implications. Thoroughly research different funds and seek professional advice to make informed decisions.
The decision to change your super fund could be based on several factors. Consider changing your super fund if you’re dissatisfied with your current fund’s performance, high fees, limited investment options, or lack of suitable insurance coverage. Additionally, if your financial goals or risk tolerance have changed, or if you’ve experienced a significant life event like a career change or approaching retirement, it may be a good time to reassess and potentially switch funds. However, it’s crucial to conduct thorough research, compare options, and seek professional advice before making the decision to ensure it aligns with your long-term financial objectives.
Yes, there are no restrictions on when you can change your super funds or limit to the number of times you can change your funds.
Having two super funds can be beneficial in certain situations, but it’s important to carefully evaluate the potential advantages and drawbacks. Consolidating your super into a single fund can simplify management, reduce fees, and make it easier to track your super. However, maintaining two funds might be advantageous if each fund offers unique features such as insurance cover that you could not obtain elsewhere. It’s crucial to consider factors such as fees, investment performance, insurance coverage, and the overall convenience of managing multiple funds. Consulting with a financial advisor can provide valuable insights to help you make an informed decision based on your specific circumstances.