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In July 2005, Choice of Fund was introduced. This gave many employees the right to choose which superannuation fund will receive their employer superannuation guarantee contributions.
Choice of Fund meant that, if eligible, you can invest in a super fund of your own choice that suits your needs whilst saving for your retirement instead of the super fund your employer has picked out for you. Many people do not realise how easy it is to switch between investments within their super.
How to switch funds?
If you’re eligible to choose a fund, you provide your employer with a Standard choice form) within 28 days starting with a new employer. Your employer is then obligated to accept your choice of fund within two months. If you wish to change your super fund along the way, you can change your super fund in two ways:
- By completing another choice form; or
- By providing written notice to your employer requesting that contributions are made to your chosen fund.
- In both cases you need to provide your employer with:
- Details of your chosen fund – fund name, fund manager ABN, their telephone contact details and super product identification number (if available)
- Your account details - account name, and account or membership number if you have one
- A letter from the fund trustee confirming that it is a complying fund
- If you are choosing a self managed super fund (SMSF), written evidence from the ATO that the fund is regulated
- Written evidence from the fund that it will accept your employer's contributions
- Details from the fund about how contributions can be made (ie payment methods)
You may make these changes at anytime, but your employer is only required to act on one of your choices in a 12-month period.
Multiple super accounts and rollovers?
If you have more than one super account, which may well be the case if you have had more than one job, you are able to combine them by rolling them into one super fund. A rollover has a few advantages.
- You can easily keep track of the fees that you pay. Various super funds typically charge multiple administration fees which could leave you with a much smaller retirement benefit. Rolling over your various super funds into one fund saves you unneccessary fees.
- You can keep track of your money more easily. Rolling over your super in one fund makes it easier to administer your financial health.
- By consolidating your wealth in the one super fund, you can take advantage of the power of compounding returns
Rolling over your super fund is easy. Your super fund will be able to provide you with a Transfer Authority Form which you can use to consolidate your funds.
2020 DIRECTINVEST provides DIY investors with the tools necessary to make the right decision when it comes to choosing a super fund. To research our broad range of super funds, click here. |
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