When you leave an employer, the super already in your account remains invested under that fund’s rules. Starting a new job does not itself require you to move it, but many people wonder what happens to super when changing jobs and how to manage their retirement savings during a transition.
For the team that looks after you at Blue Diamond Financial, the useful question when changing jobs is whether your super arrangement still fits your financial position and retirement objectives.
Superannuation When Changing Jobs
You can usually nominate the fund you want your new employer to pay into. If you do not choose one, Australia’s stapled super rules generally require your employer to request details of an existing account from the Australian Taxation Office. That account can follow you between jobs. Changing employers and changing super funds are therefore separate decisions.
Your new job may come with a different salary, occupation or employer contribution arrangement, changing the circumstances around your super even if you keep the same fund.
Multiple Super Accounts
If previous jobs have left you with multiple super accounts, fees and insurance premiums may be deducted from more than one balance. Before combining those accounts, check what you would lose along with the duplicated fees. An older account may hold insurance you still need, while a particular fund may have investment options or benefits worth retaining.
Super Fund Consolidation
Before you consolidate super funds, compare the accounts you hold rather than selecting one because it has the largest balance. Moneysmart specifically recommends checking employer contributions, insurance and fund type before consolidating, and warns that some defined benefit members can lose valuable benefits if they leave.
Check:
- Fees and ongoing costs
- Life, TPD or income protection insurance attached to each account
- Investment options and whether they suit your strategy
- Employer-specific or defined benefits
- Where your new employer’s contributions will be paid
Closing an account can end the insurance attached to it, and comparable replacement cover is not guaranteed, especially where age or medical history affects eligibility.
Job Changes and Retirement Planning
Your new remuneration can change the amount going into super and the amount available for voluntary contributions. A different occupation can also alter the relevance or cost of insurance held through your fund.
Keeping, changing or combining your super accounts affects money intended to fund your retirement, so the decision needs to fit the retirement plan you already have or are building.
Changing jobs? Speak with Blue Diamond Financial today to review your superannuation strategy and keep your retirement goals on track.