What Is Superannuation Consolidation

By Andrew Ledingham

What Is Superannuation Consolidation?

22 March 2020

If you have ever changed jobs, then the chances are that you have more than one super fund. This means you are potentially paying more than one set of fees to manage your super…

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The more you pay, the less you have – and over time even small savings can really add up. Consolidating your super simply means combining the benefits held in two or more funds into one fund. This simple step can save you time and money – and these savings can really add up over time.


HOW CAN CONSOLIDATION SAVE YOU MONEY?

When you hold money in super, you need to pay fees to whoever is managing that money. These fees are generally divided into two types: fixed ‘flat’ fees (which are the same regardless of the balance

within the fund); and variable fees (which are typically calculated as a percentage of the amount held within the particular fund).


Consolidating your benefits into one fund means you only pay one ‘set’ of fixed fees, instead of two or more sets when you have two or more funds. In addition, if the benefits are consolidated into a fund with lower variable fees, then the total amount of variable fees paid will be lower.


THINGS TO REMEMBER

You should always get advice before you consolidate your super. This will ensure that the consolidation is done the right way. For example, your ‘lost super’ fund might have some life insurance cover that you want to hold on to. If you move all of your benefits out of such a fund, you lose the life insurance.

AUTHOR : Andrew Ledingham  |  CATEGORY : Financial Services

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