Job change and your super
Changing jobs can be a big deal but managing your super through the process doesn’t have to be.
By Martin Kennedy - 4 min read
A little about Martin
Martin Kennedy is the Head of Education Services, responsible for the development and execution of education content and messaging. With over 25 years’ experience in the super industry, Martin has worked in many different roles developing a strong understanding of member communication skills and requirements.
There aren’t too many of us that have one job for life these days.
Over 1.3 million people changed jobs in the year to Feb 2022, and with an average tenure of just over 3 years, you could expect to have more than 12 different jobs over your working life. When you do change jobs though, the promise of a new start can often be quite exciting. So, it’s understandable if super isn’t a top priority.
There will probably be plenty of documentation to complete for your new employer and it’s at this point that you’ll usually be asked where you’d like your employer’s super contributions to be paid.
Since it’s generally not the best move to join a new fund every time you start a new job, here are three key points to consider.
1. Account stapling rules the day
The government has taken some initiative here through what’s called the ‘account stapling’ rules that now apply. The basic concept is that you will join a super fund when you first start work and it will follow you from job to job—unless you actively choose to join another super fund.
For those already in the workforce and have a super account, this means a job change need not result in a new super account as well. You can nominate your existing super account as the account you want your contributions to go to. If you don’t make a choice, your new employer must pay super into your existing super account (or stapled fund) that the Australian Taxation Office (ATO) nominates.
The aim is to avoid ending up with an unnecessary number of super accounts and having your balance eroded by paying multiple sets of fees and insurance premiums.
It’s an obligation on your new employer to work out where to pay your super, and you’ll usually be provided with a Choice of Fund form to complete, so they don’t have to go through the account stapling process with the ATO.
It’s really just a matter of you actively taking control of what happens to your super when you change jobs versus leaving it up to your new employer and the ATO to sort out. There are also a few important things you should consider at this point, especially if you’ve currently got employer subsidised fees or insurance cover in place.
2. When it’s time to leave…
Depending on your current situation, leaving your employer can mean leaving your employer’s super plan as well.
While you’ll stay a member of the super fund, you’re likely to be moved to a different account type and will need to understand the likely impact to your fees or insurance cover. You’ll be responsible for fees (which will come out of your account) that may previously have been paid or subsidised by your employer. You also won’t be covered by the insurance arrangements of your employer’s super plan, and while you’ll have replacement cover from the day after you leave your employer, some details of your cover may change and the premiums will now be deducted from your account.
If you’re in a Defined Benefit account when you leave your employer, you will probably be moved into a standard accumulation account, which means you’ll then need to consider things like making an investment choice (how and where your super gets invested) and setting goals, or planning for your retirement lifestyle.
Either way, you’ll hear from us with details about the transfer to your new account, including your investments, fees and insurance. Better yet, your key account details (like your member number and login details) will remain the same. You can also read the Your super and Insurance when leaving an employer fact sheet.
3. Time to combine?
If you’ve already had multiple jobs, there’s a good chance you might also have multiple super accounts. Getting a new job and making decisions about super might also be the right time to consider whether you’re better off bringing these accounts together into one.
Apart from making it easier to keep track of all your super savings, we mentioned earlier that multiple accounts = multiple sets of fees, and cutting those out will help grow your balance faster. Importantly, you should find out about any entitlements or insurance cover that might stop when you close your other super accounts.
Once you’ve chosen your preferred account, your super fund can help you to combine any other accounts (often through your online account), or you can do it through your myGov account linked to the ATO. While you’re there, the ATO can also help reunite you with any lost or unclaimed super.
Weighing up your options
If you’re considering your super choices when changing jobs, it’s important to remember that you can take us with you to your new job. Weigh up the benefits on offer above and beyond the fees and insurance cover, including:
- GoalTracker® – by telling us more about you and your goal for a great life after work, we can build your super and investments around you with this award-winning innovation
- Investment strength and expertise – with Russell Investments you’re tapping into the same highly-rated, award-winning global investment expertise as many of the world’s largest investors
- An extensive information and advice offering – from general or phone-based advice to personal financial planning
- Easy options to manage your account – online access and the Super Tracker App
If or when you’re changing jobs and need any help to understand what your options are and how to keep your current super account you have with us, just get in touch for a quick chat. We’ll help you sort it out.
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