Having the right super fund can make a big impact on your financial future. So, if you’re thinking about whether to change super funds, make sure you’re across the key things to look for. Here are the top 10 tips for when you’re switching super funds.
1. Decide which type of super fund is right for you - industry or retail
When you’re considering a change in super funds, it’s good to understand the difference between a retail and an industry fund. The biggest difference is what happens to any profits they make. Industry super funds are ‘profit to member’ organisations, which means profits are returned to members, not shareholders. Retail super funds are commonly run by financial institutions, such as banks or wealth management companies and return profits to shareholders.
than 5 million Australian workers belong to an industry super fund.1
2. Look at the long-term performance and investment returns
The performance of your super fund can make a big difference to your balance. Switching to a super fund that has a history of strong returns may mean you end up with more money in retirement.
When you look at a fund’s returns, look at past performance - not just how it’s performing today. Also look at what that performance means for the ‘net benefit’ of your super. Net benefit is the number that really matters , it’s your investment returns minus your admin and investment fees.
Compare: Net benefit of AustralianSuper’s Balanced option
|NET BENEFIT - SUPER|
|OVER 5 YEARS||OVER 10 YEARS||OVER 15 YEARS|
|AustralianSuper Balanced option||$24,306||$86,662||$146,500|
|All super funds (average)
|Retail funds (average)
Net benefit refers to investment earnings to 30 June 2020 (less admin and investment fees). Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.
The table shows what a member would have for 5, 10 and 15 years to 30 June 2020, in addition to a $50,000 starting balance and employer contributions, assuming they started with a $50,000 annual salary2.
3. Know how your fund invests your super
Each super fund invests your money differently. When looking to change super funds, it’s important you know what your investment options are, and the level of risk associated with each option.
At AustralianSuper, we invest with one goal in mind: to help members achieve their best possible retirement. Our in-house investment team of over 170 experts invests across the globe to help members’ balances grow over the long run. More than 90% of members are invested in the Balanced option, designed for long-term growth.
Investing for a brighter future
We’ve made a commitment to achieve net zero carbon emissions by 2050 in our investment portfolio. The transition to net zero 2050 is already well underway, with the carbon intensity in the Australian and international shares portfolios reduced by 44% between 2013 and 20193.
4. Get a clear picture of the fees you’ll pay
Super funds charge fees for the services of managing and investing your money. The fee, and how often it’s paid can differ. With some funds you’ll pay a set fee, and with others a percentage of your account balance.
If you’re planning on making the switch to a new super fund, it’s a good idea to compare the costs of fees. You can use the ChantWestSuper AppleCheck tool to compare funds side-by-side.
How AustralianSuper’s fees work
AustralianSuper uses its size and scale to secure competitive fees and costs for members. If you have an account with us, your admin fee is $2.25 per week plus up to 0.04% pa of your account balance. You’ll also pay an investment fee and a premium for any insurance cover you have4.
5. Make sure you have the right insurance cover through your super
Most funds offer a basic level of insurance cover to members, and over 70% of Australians with life insurance have it through their fund5. Before you switch to a new super fund, it’s important to know you’ve got the right level of cover and aren’t paying more than you should.
Types of insurance through super
At AustralianSuper, we provide 3 types of insurance cover for members:
- Death cover (Life insurance),
- Total & Permanent Disablement (TPD) cover,
- and Income Protection.
We use our size and scale to negotiate discounted premiums for members, with premiums automatically deducted from your super balance.
6. Consider a super fund that offers you help and support
Super is complex, and a bit of support can help you make the right financial decisions for the future. Choose a fund that offers you trusted professional advice and support when you need it.
AustralianSuper has been awarded a Canstar 5-Star Rating for Outstanding Value in Superannuation in 2020, and has been named Australia’s most trusted fund, 8 years running6.
The team is here to support members and offer a range of general help and guidance, as well as professional advice and online services including:
- Online calculators
- Helpful articles
- Education and webinars
- Over-the-phone advice
- Comprehensive financial advice
7. Check to see that you’re not losing any benefits linked to your work
Before you change funds, check if your current fund provides any benefits based on who you work for or the industry you’re in, for example, discounted insurance cover. By switching to a new fund, you could lose these benefits. Also check that you’re not working under an agreement that requires you to be a member of a certain fund.
8. Create a shortlist and compare super funds
To compare funds yourself, use the ChantWest Super AppleCheck tool. It lets you see up to 3 super funds side-by-side to compare fees, long-term performance and other factors to help you make an informed choice.
9. Tell your employer you've changed super funds
If you change funds, remember to let your employer know so they can pay your super into the correct account.
If you've chosen AustralianSuper as your new fund, your next step is to join. If you’ve already made the switch to AustralianSuper, you can tell your employer using the Pay my super into AustralianSuper form.
Last year, over 400,000 people joined AustralianSuper during the 12 months to 30 June 20207.
10. Don’t forget to combine your super funds into your new one
Make sure all your super is in one place – not in multiple accounts. Multiple accounts could mean multiple fees. In 30 June 2019, it was announced that there was $20.8 billion in lost and unclaimed super in Australia8.
If you don't know your other funds’ details or want to search for lost super, you can consolidate via your online account after you’ve joined AustralianSuper. To do this you will need 2 forms of ID and must provide AustralianSuper with your TFN.
AustralianSuper members can also combine super accounts by completing a Consolidate your super form9.
If you’re not an AustralianSuper member, you can visit the ATO – Find lost super.
It’s never too late to change funds. If you’re just starting work or still a long way from retirement, the benefits of being with a good fund can make a difference to your super balance. For those closer to retirement age, seeking personal guidance to make the most of your remaining working years, and putting a retirement plan in place, can also help you prepare.
- industrysuper.com - Choose an Industry SuperFund
- Comparisons modelled by SuperRatings, commissioned by AustralianSuper. The outcome shows the average difference in ‘net benefit’, a measure of past investment earnings after administration fees, investment fees and contribution taxes have been taken out. The results compare the AustralianSuper Balanced investment option and comparable balanced options, for historical periods to 30 June 2020. Insurance premiums and other fees and costs may also apply. Outcomes vary between individual funds. See Assumptions for more details. Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns. AustralianSuper returns before 1 July 2006 are calculated from equivalent options of the ARF and STA super funds.
- Source: S&P Global/Trucost ESG Analysis. Portfolio data at 30 June 2013, 30 September 2015–2019. Carbon to value invested: C02 emissions per $million
- Correct at original date of publication – March 2021
- moneysmart.gov.au - How life insurance works
- Total people joining for the 12 months to 30 June 2020. Includes direct joins and people joining via employers’ that selected AustralianSuper as their default fund.
- AustralianSuper received the Canstar 5-Star Rating for Outstanding Value in Superannuation and Account Based Pension in 2020. Full methodology available for super here. And methodology for account based pension here. Ratings are only one factor to be taken into account when choosing a super fund.
- ato.gov.au - Lost Super
- Before combining your super, ask your other super provider about any fees or charges that may apply, and other information about the effect this transfer may have on your benefits, such as insurance cover
This information may be general financial advice which doesn’t take into account your personal objectives, situation or needs. Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.