Consolidating super accounts

The benefits of consolidating your super are clear: stop paying multiple fees, save money and simplify your obligations. While there is no tax on super consolidation, there are considerations you should be aware of.

1. Triggering CGT - If your super fund sells assets to facilitate the consolidation, it may trigger capital gains tax. However, this may not directly impact your personal tax liability since we’ll factor this into your strategy.
2. Preserving tax components - Super balances have tax-free and taxable components. These remain after consolidation, preserving your fund’s tax status. This is important for understanding how your super will be taxed going forward.‍
3. Tax insurance - If your existing funds have insurance, you’ll want to ensure your new fund has equivalent or greater coverage. If your old fund’s premiums were tax deductible, check if this remains the case with your new fund.

‘Lost’ super is a surprisingly common occurrence and can occur for a number of reasons. For example, you might undertake a short-term job, have a new super fund created in your name, then move on to another company and forget about that fund. Or you might change contact details, and your super fund may lose track as your details change.

Your account is considered ‘lost’ when your fund makes two written communication attempts to contact you, which are then returned unclaimed.

Australian tax law requires super funds to notify the ATO of any lost members. The fund will then provide your details to the ATO. Your super balance will be held by the fund until claimed or consolidated with another eligible super fund.

Consolidating your superannuation accounts requires searching and finding all the super accounts you may have in your name. In some cases, you may even hold super accounts without knowing it.

There are two ways you can consolidate your super:

1. Online

• Log in to your my.gov.au account and then to your ATO account. If you haven't already, you may have to link these two accounts.
• Click on the option for ‘Super’, then click ‘Manage’.
• You should now see an option to ‘Transfer super.’

Alternatively, if you know which super funds you hold, you can head to the ATO website and fill out a ‘request for rollover of the whole balance of super benefits between funds’ form.

2. By phone

• The first step is to find those lost super accounts. You can begin this process by calling the ATO on their superannuation helpline at 13 10 20.
• Choose the Lost Members’ Register option in the menu provided, and ensure you have your tax file number on hand.
• You will then be guided through the process.

But this can often be a lot of work. Instead, your Liston Newton financial adviser can help you track down your lost super for you and manage the steps necessary to consolidate your super funds.

While you won’t pay any out-of-pocket fees for consolidating your super, there may be associated administration fees from your super providers for each super account you have. So check with your super provider to find out the specific fees they have involved.

Consolidating your super account has a few significant benefits:

• Fewer fees to pay - Instead of paying administration, account, or member fees on each separate super account, you’ll now only pay one set of fees. This stops your super from getting eroded by fees and lets you build a better fund for your future.
• It’s easier to manage - Keeping your super in one single account makes it easier to manage your savings and monitor your growth. There’s less paperwork and less communication to deal with. It’s easier all around.‍
• Improve your retirement strategy - Consolidating your super into one single account means you can keep your retirement savings in one central location. You can streamline your savings plan, avoid unnecessary fees, and boost your long-term savings

Unfortunately, there is no set timeframe for consolidating your super. It all depends on the number of accounts you have and the speed and efficiency with which your super fund works.

The actual transfer of funds, however, is a simple account-to-account transfer. This process shouldn’t take more than 3 to 5 days.