Consider the best fund for you when you change jobs

When you start a new job, you may be asked if you’d like to join the super fund of your company’s choice. But what’s the best choice for you?

High fees can significantly eat away at your retirement savings over time and the insurance and benefit options of some superannuation funds may not suit you.

So remember that changing jobs rarely means you have to change your super fund. In most cases, employees can choose the fund that’s best for them.

Roll over your savings in to one fund

If you've had more than one job, chances are you'll have more than one superannuation account. So you may be paying multiple fees, which eat away at your retirement savings over time.

Two ways to eliminate multiple fees and maximise your savings are:

1. Rollover: find which funds your superannuation has been contributed to and consider moving all your super money in to one fund of your choice.


2. Find your lost super: there is over $12.9 billion lost superannuation in Australia. To find any lost money you may have, either call the ATO on 13 28 65 or use their Superseeker tool online – all you’ll need is your Tax File Number (TFN) and date of birth.

Before you rollover or consolidate your superannuation, you should check to see if insurance or other benefits will be impacted or lost. Some funds may also charge withdrawal or exit fees.

Salary sacrifice

Another way to boost your balance and potentially save on tax is by contributing an additional part of your salary.

This is called salary sacrificing and it works like this:

• you ask your employer if they will pay some of your gross salary into your super fund.
• your superannuation contributions are taxed at a maximum rate of 15% (provided you don’t exceed the before tax contribution cap for the year).
• Salary Sacrifice contributions do not get treated as taxable income, so income tax is not payable on the amount paid to the super fund.

See below for a comparison on how much you could save on tax through salary sacrificing.

Remember superannuation contributions must remain in a super fund until you meet a condition of release such as reaching preservation age and may be subject to tax at time of exit. The 9% employer contribution may be impacted by an individual’s decision to make salary sacrifice contributions. A concessional contribution cap of $25,000 p.a. applies (2010/2011) after which pre- tax super contributions are taxed at a rate of 31.5%

The example above is for illustrative purposes only, actual benefits may vary and will depend on individual circumstances.

^1. 2010/2011 marginal income tax rates applied.

^2. 1.5% Medicare levy applied.

^3. 15% Superannuation Contribution tax applied.

Keep track of your savings and investment options

Superannuation is a form of saving that is often set up and forgotten about. While it’s important that you have a fund that does most of the heavy lifting, like most forms of savings, keeping track of your contributions could help keep your goals on track.

Here are five points to consider checking.

1. Your fund has your Tax File Number, so you don’t end up paying three times more tax than you need to.


2. You’ve provided your fund with your up-to-date contact details, including your email address, so you receive:
   • member updates
   • fund reports
   • investment performance reports
3. Your annual member statements:
   • what you had at the start of the year
   • your employer's payments during the year
   • any amounts you paid in
   • fees deducted
   • how much was taken out for government taxes
   • how much the fund credited to your account from its investments
   • what you now have at the end of the year
4. Cost of insurance cover, so you don’t pay more than you need to


5. Your investment options, to make sure they suit your needs if they change

Consider insurance through your fund

Another way you could maximise your savings is by combining your superannuation with your income, disablement and death insurance.

This means your insurance premiums payments come straight out of your super account.

Since premiums are paid with after-tax dollars, it could be more tax-effective than if you were to pay from your personal savings. And because super funds often buy insurance in bulk, insurance is often cheaper for you.

Combining the two also gives you one less bill to worry about paying and means the same people who help you look after your nest egg cover you for income, disablement and death

So when choosing a fund, consider whether you’d like your superannuation and insurance under the one roof.