The benefits of consolidating superannuation are well documented, yet the Australian Taxation Office (ATO) still holds $18 billion held in lost superannuation and Australians are estimated to hold up to three superannuation accounts each on average.

The advantages of consolidating superannuation accounts include:

• cost savings by paying only once set of fees
• reduced paperwork
• easier to track your superannuation

Despite these advantages some people choose not to consolidate their superannuation for the following reasons:

• to maintain insurance cover held across various superannuation funds (these people may not be able to organise alternative insurance cover due to their health) which they may lose through consolidation
• their award restricts superannuation fund choice and access to alternative investment strategies via other superannuation funds (i.e. Self-Managed Superannuation Funds (SMSF’s))
• they have not invested the time to consolidate their superannuation

The Government has made it easier to locate and consolidate superannuation funds in the past 12 months. By using the Tax File Number (TFN) as a universal identifier, all superannuation can now be tracked and quickly transferred between superannuation funds.

It's easy to consolidate multiple superannuation accounts into a single fund

The best way to consolidate superannuation accounts is to register with the myGov website (www.my.gov.au). The myGov website will allow you to link all of your government interactions in one place. Once registered, you can link your profile to the ATO website and then view the details for all your superannuation funds. The myGov website also has the functionality for you to rollover or consolidates all your superannuation (within three business days).

If you do not want to register for myGov, your superannuation fund will be able help you to locate your lost superannuation and consolidate it for you. This approach can be completed by either calling your fund or completing the required forms on your fund’s website.

Deciding which funds to be consolidated

Before consolidating your superannuation, it is recommended that you check the following:

• Are there any termination fees?
• Are there any insurance benefits which may be lost?
  Life and Total and Permanent Disablement insurance
  Income Protection insurance
• Which superannuation fund has the range of investment options appropriate for your needs?
• Is your employer able to contribute to your chosen fund?

Care should be taken when consolidating your superannuation as some important benefits and features may be lost. Often it can be difficult to determine the fees you are paying and compare the investment performance between superannuation funds because they invest your superannuation in different ways. Further, by consolidating your superannuation, you may lose valuable insurance benefits.

Many people fall into the trap of relying on comparison websites to do their superannuation fund research. Where you are a member of a corporate fund established by your employer, these comparison websites do not allow for the administration fee discounts your employer has negotiated, nor insurance provided to you automatically without your providing health evidence.

Before consolidating your super, you should speak to a licenced financial planning professional, (preferably one who is independent), so they can provide you with objective information and advice which is in your best interest. A financial planning professional will also help you to understand the insurance terms, conditions and definitions in each of your superannuation funds and assist you to transfer the insurance cover you have in one superannuation fund to another.

Chris Chan, Head of Superannuation, T +61 3 8663 6292, E chris.chan@au.gt.com