Mozo guides

How to change super funds

Person is looking at a piece of paper and how to change his super fund

As you journey through your career, you may find yourself saving up for retirement. And in doing so, it’s possible that you’ve started thinking about whether your superannuation provider is still right for you. 

This guide will cover what you need to know about changing super funds, with topics ranging from when to consider switching funds, and how to choose the right one for you. 

So let’s get started.

Why you might change super funds

Couple are weighing up the idea of changing super funds on their tablet

There are a number of reasons why you might change super funds. It could be that your current one hasn’t given you a decent return on your investments in years. Alternatively, you could be paying a lot in account management fees. It might also be that you’ve started to look into a different type of fund to suit your needs. This can look something like wanting your super to be invested in an ethical super fund that aligns with your values.

Or maybe you find it important to have more control over your investments and would like to combine your retirement money with a family member. In this case, you could be looking to switch over to a self-managed super fund.

Things to consider before changing super funds

Two people are looking at sticky notes to consider changing super funds

Before you change super funds though, there are a few things you may want to first consider. 

  • The performance of your super fund. While it can be disappointing to see a lower return on your investments over the course of a year, it might be worth seeing how your super fund performs over a 5 year period. This is because super is a long-term investment, and more time with a fund may provide you with a better gauge of whether to make the switch. 
  • Insurance cover. If you decide to rollover super, it’s important to keep in mind that you may lose your insurance cover when no contributions are made to the account. This might include death cover, or income protection so it’s a good idea to review your policy while weighing up the decision. 
  • Loss of benefits. When starting over with another super fund, it’s possible to lose out on some acquired benefits with the one you’re leaving. It could be discounts on wellness products, for example. 
  • Potential incompatibility with investments. If you’re happy with your current investment returns, there is the risk of getting a lower return with a different provider. So rolling over your funds could potentially mean less money by the time you retire.
  • Fees. The fund that you’re leaving or joining may incur some fees. It could be exit, withdrawal, entry, or deposit fees, for instance. This needs to be considered.

With all of this in mind, you might be wondering how to choose a new fund. Let’s have a look.

How to choose a new super fund

Woman is sitting at her desk and thinking about how to choose a new super fund

Here are some things to look at when determining the right super fund for you:

  • Investments. When reviewing a potential provider, you could check out their investment options and consider whether it meets your super objectives. Moreover, it’s useful to have a look at the long-term returns of member investments to track the performance of a few funds. By doing this, you may be able to narrow down the list of providers.
  • Fees. There are generally some fees that you’ll have to pay for the upkeep of your fund. While these fees may not seem like much, it can start to add up by the time you retire. By doing the prep work, you might find a provider with minimal fees which could help you save quite a bit in the long run.
  • Insurance cover. Depending on your circumstances, insurance can help you with a wide range of things. For instance, if you’re at high risk of injury due to the nature of your job, you may opt for an insurance cover that includes helping you with your living costs if you get injured. 

It’s important to take your time and do your research, as this is key to finding a provider that’s most compatible with your needs.

Steps to change super funds

Person is sitting on some steps as she works through the process of changing super funds on her computer

If after giving it some thought you believe changing super funds is the right move for you, you’ll want to know how to go about doing that.

So here are some steps to follow: 

Step 1. The first step is finding the right provider for you. You might do this by shopping around and picking a super fund that includes the features you’re looking for, like low fees or a particular insurance cover.

Step 2. Next, you’ll want to check that you can transfer your super out of the old account and into the new one. In some cases, you may not be able to rollover the entirety of your fund into another, so it’s best to check the rules of your preferred super fund and the one you’re leaving. 

Step 3. Then comes the preparation you can take on to make the switch. This includes having your tax file number (TFN) on hand. Additionally, you'll need the unique superannuation identifier (USI) of your new super fund. This is a crucial code used to identify super funds in Australia, and it's necessary for the transfer process.  

Additionally, it’s a good idea to spend a bit of time looking at the Product Disclosure Statement (PDS) of your nominated super fund. By reading and understanding this document (that’s found on the provider’s website), you can ensure that you’re happy with the terms of your fund before committing. 

Step 4. Now, it’s time to join your new super fund. To sign up, you can fill out a form on the super provider’s website.

Step 5. The next part is making a super transfer request. This is done by logging into your myGov account, clicking on the Australian Taxation Office (ATO) tab, and selecting super. Then manage, and transfer super.

Step 6. Wait for the transfer of your super. Generally speaking, you might expect to see part or all of your retirement balance in the new fund within a couple of weeks. 

Step 7. All that’s left to do is notify your employer. Once your fund is up and running, it’s important to let your employer know that you’ve changed super providers so they can make future contributions into your new fund.

Step 8. (Optional). Close your other super account. If you’re transferring the whole balance, you can do this on your myGov account. Alternatively, you could visit the website of your super provider and fill out a form if you’re only making a partial transfer.

To consolidate, or not to consolidate super

Blocks of wood to show whether to consolidate or not to consolidate super

Debating whether it’s better to keep to a single fund, or several? Here are some pros and cons to consolidating super:

Pros of consolidating super:

  • Less administration fees payable
  • Easier to keep track of your funds in one place
  • Possibly finding better insurance cover.

Cons of consolidating super:

  • Possibly not being able to replace current insurance coverage
  • More limited range of options when it comes to investments.

All in all, these are some things to consider when changing funds. It’s true that everyone’s situation is different, so you may want to make your decision based on what you think will work for you. Additionally, enlisting the help of a financial advisor can also be useful in assessing your options.

As super is an investment in your future, you may be interested in learning more about it. So why not check out our superannuation guides hub and start getting ahead of your retirement planning.

Changing your super fund FAQ's

Can I rollover all of my funds in one go?

Yes, you can potentially rollover all of your funds in one go if your super provider permits this. Do note though, you can only transfer your entire super balance using the ATO online services or paper form. 

Do I need to tell my employer I changed super funds?

If you’d like future super contributions to be made into a super fund that’s different to the one your employer has made previous contributions into, it’s best to let them know. You will likely have to fill out the same superannuation choice form as you did when you first joined the company. 

Are there any taxes payable when switching funds?

There shouldn’t be any taxes payable when you rollover money into a new super fund. However, there is a possibility that you might encounter discharge or deposit fees by changing super providers. And while there aren’t usually any taxes associated with switching funds, there are some tax rules that apply when you withdraw super and have it paid into your bank account.

What happens to my super account after rolling over the funds?

This can depend on whether you make a partial, or complete transfer of super. In the first instance, your account may remain open and it could eventually be transferred to the ATO as lost super after a period of inactivity. In the second scenario, your account will usually be closed in the process of transferring your whole super balance using the ATO’s services. 

Sophie Wong
Sophie Wong
Money writer

Coming from a background in financial services and criminology, Sophie strives to get others excited about their money journey as they reach their financial goals. She aims to make things like budgeting a fulfilling achievement rather than a dreaded task.