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Can You Have Multiple Super Funds

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by

Recruitment Super
in

Having multiple super funds is a common scenario for many Australians. With the average person changing jobs multiple times throughout their career, it’s not uncommon to end up with more than one superannuation account. But is it a good idea to have multiple super funds? In this article, we will explore the implications of having multiple super funds and whether it is a wise financial decision.

The Basics of Superannuation

Superannuation is a way to save for retirement and is compulsory for most working Australians. It is designed to provide income in retirement to supplement the Pension/”>Age Pension. Employers are required to contribute a percentage of an employee’s salary into a super fund, which is then invested by the fund to grow over time.

Can You Have Multiple Super Funds?

Yes, you can have multiple super funds. This often happens when you change jobs and your new employer’s default super fund is different from your existing fund. Instead of rolling over your balance into your new fund, you may end up with two or more super accounts.

Pros of Having Multiple Super Funds

  • Diversification: Having multiple super funds can provide you with a diversified investment portfolio. Different funds may offer different Investment Options, which can help spread your risk.

  • Insurance Coverage: Some super funds offer Insurance coverage as part of their membership. By having multiple funds, you may have access to additional Insurance benefits.

  • Choice: Having multiple super funds gives you the freedom to choose how your money is invested and the level of fees you are willing to pay.

Cons of Having Multiple Super Funds

  • Increased Fees: Having multiple super funds means paying multiple sets of fees, which can eat into your retirement savings over time.

  • Lost Super: With multiple funds, it can be easy to lose track of your retirement savings. This can result in lost super and unclaimed money.

  • Administrative Hassle: Managing multiple super funds can be time-consuming and confusing. Keeping track of your investments, fees, and Insurance coverage across multiple accounts can be challenging.

What Should You Do?

If you find yourself with multiple super funds, it may be a good idea to consolidate them into one account. This can help simplify your finances, reduce fees, and make it easier to keep track of your retirement savings. Before consolidating, consider the following:

  • Compare the fees and performance of each fund to determine which one is the best fit for your retirement goals.

  • Check for any Insurance coverage or benefits you may lose by consolidating your super funds.

  • Inform your employer of your chosen super fund to ensure future contributions are directed to the right account.

Conclusion

While having multiple super funds is not necessarily a bad thing, it’s important to weigh the pros and cons carefully. Consolidating your super accounts can streamline your finances, reduce fees, and make it easier to manage your retirement savings. Consult with a Financial Advisor if you’re unsure about the best course of action for your super funds.