Combining your super: fewer accounts, fewer fees

Nobody sets out to collect super accounts; they accumulate. Consolidating — which per Moneysmart simply means combining your super balances into one account, and is sometimes called a rollover or transfer — exists precisely because so many working lives end up scattered across several funds. Job changes are the classic engine: Moneysmart lists leaving a corporate fund when you change jobs among the standard reasons people move funds at all, and a new employer can mean a new fund unless you bring your own account details with you — Super basics covers how accounts get opened in the first place.

Some of the trail goes properly missing. Moneysmart notes that lost and unclaimed super in Australia runs to billions of dollars, and that some people are surprised to find money they didn't know they had. The place to look is the ATO's keeping-track-of-your-super service via myGov, which shows every super account held in your name — including ones a younger you signed up for and promptly forgot.

There's even a small tell built into the system. In the ATO's online service, the 'Transfer super' option only appears if you have more than one super account — the machinery of consolidation switches itself on the moment duplication exists. If the option is sitting there in your myGov, that is the system quietly telling you there's a spare account somewhere with your name on it.

Moneysmart's list of what consolidating buys you is short and telling: you may pay one set of fees, get less paperwork, and find it easier to track your balance. Read it in reverse and you have the bill for duplication — every spare account means another set of fees, another stack of statements, and one more balance you're probably not watching. Administration fees — the charges a fund levies just for running your account — arrive whether or not any contributions do, so a dormant account left behind at an old job keeps paying for its own upkeep out of your money.

Insurance can double the duplication. Moneysmart's consolidation checklist exists partly because a fund account may carry insurance — life, total and permanent disability (TPD), and/or income protection cover. Hold two accounts and you can be holding two lots of cover, each paid for out of the account that carries it; insurance is never free, so duplicated cover you didn't choose means paying more than once for protection you could only ever claim on once in some cases — Insurance in super covers how that cover and its premiums actually work.

The quiet part is what the drag compounds into. Every dollar that leaves a super account in fees is a dollar that stops earning returns for the decades between now and retirement — so a small, fixed, annual leak in a spare account grows into a much larger hole in the final balance. The widget below puts your own numbers on exactly that: what the duplicated fixed fees add up to, and what the same stream of dollars could have grown into if it had stayed invested. Percentage-based fees — usually the bigger drag of the two — get their own treatment on Super fees.

The check that outranks all the others is insurance. Before you consolidate, Moneysmart says, check whether your current fund carries cover — life, TPD, income protection — because if you change funds, you may not get the same cover. Take particular care if you have a medical condition or are older: cover that was granted automatically years ago may not be offered again on the same terms, or at all. There's one reassuring mechanic — when you change funds you usually keep the existing insurance until the replacement policy is issued and your new cover is confirmed — but the order still matters: confirm the new cover before the old account closes, never after.

Then the money checks. Ask whether changing funds affects how much your employer contributes — some employers contribute more to certain funds, and walking away from that is a pay cut nobody mentions. Compare fees and exit costs on both sides of the move. And judge performance over five years or more, not one bad year — Moneysmart's advice is not to switch just because your fund had a poor run, or because last year's top fund looks shiny; it may not stay on top. Notably, the best account to keep isn't automatically the one with the highest balance — Moneysmart is explicit that it may be one of your small accounts, or an account with a completely new fund.

Two structural checks close the list. First, find out whether an account is accumulation — the common kind, where your balance is simply contributions plus returns — or defined benefit, an older style where the payout is set by a formula. If it's defined benefit, get professional advice before rolling anything out: some carry valuable benefits, and if you leave, you can't rejoin. Second, mind the pressure. Moneysmart warns bluntly about high-pressure sales tactics — cold calls, click-bait advertising, promises of unrealistic returns — aimed at moving your super into risky investments. Feeling rushed is itself the signal: stop, check the claims, and if unsure get independent advice from a licensed financial adviser.

Once the checks are done, the mechanics are almost anticlimactic. The one real decision is choosing the account you want to keep — made on the checklist above, not on balance size — and then rolling every other balance into it. Moneysmart offers three routes, and the first is the one most people use: myGov. Sign in at my.gov.au (or create an account), link it to the ATO if you haven't already, go to 'Super' and then 'Manage' in the ATO service, and select 'Transfer super'. myGov shows your super accounts and lets you move money from one to another, and the whole thing happens online.

The other two routes exist for when myGov doesn't suit. You can contact the fund you want to keep and ask them how to roll your other super into that account — funds handle these transfers routinely and will walk you through their forms. Or, if you cannot use myGov at all, an ATO rollover form — a paper request to move a balance between funds — does the same job by post. The destination is identical whichever door you use; pick the one you'll actually finish.

There's a final step that's easy to skip and expensive to forget: tell your employer where to pay. Give them the fund name, the unique superannuation identifier (USI) — the code that identifies your exact product within the fund — and your member number, plus any other details they ask for. Consolidating tidies up the past; pointing your employer's contributions at the keeper account is what stops the trail starting all over again. How and when those contributions must arrive is changing too — Payday super has that story.