What to consider before switching super funds

It’s always a good time to get your financial affairs in order and ensure your nest egg is working hard for you.

You might be satisfied with the performance of your superannuation fund and its fees – or perhaps you’re not.

There are, however, a few things you need to consider before jumping to a new super fund, especially if you don’t want to jump out of the frying pan and into the fire.

It isn’t a matter of looking at just one indicator, you will need to take a much more holistic approach when you are looking for the right fund to switch to, weighing up performance and fees against other important considerations.


Make sure you are comparing apples with apples.

First, ensure you are comparing a balanced option against another balanced option, assuming that you are happy to stay with the same risk profile.

If you do decide to compare across different investment options, make sure you look at the investment performance across the same time period.

When it comes to selecting time periods you should usually look at the performance over at least five years, to ensure you have a clear picture. A fund may have suffered one bad year, but when you look at its five-year performance, you get a clearer idea.


Professor Helen Hodgson, a tax expert from Curtin Law School, told Business Insider Australia: “The biggest erosion of superannuation account balances comes from fees and charges.

“The PDS (product disclosure statement) for the fund should set out what the current fees are, but check for indirect fees on investment balances as well as account administration fees.”

Superannuation fees are either a dollar amount or a percentage or both. Either way, the lower the fees, the better.


Super funds typically have three types of insurance for members:

  • life (also known as death cover)
  • total and permanent disability (TPD)
  • income protection.

Most super funds will automatically provide you with life cover and TPD insurance. Some will also provide income protection insurance. This insurance is for a specified amount and is generally available without medical checks, MoneySmart advises.

TPD insurance cover in super usually ends at age 65. Life cover usually ends at age 70.

When comparing the default insurance offered by super funds, look for:

  • the premium rates
  • the amount of cover
  • any exclusions or definitions that might affect you.

Other considerations

You might also like to consider the services offered by the funds you are comparing, such as financial advice.

You can also investigate if your fund allows you to have a mix of investment options, with a different weighting between growth, balanced, cash or property. There are also funds that offer ethical investments only, which may be something that is important in your investment strategy.

Have you ever switched super funds? What were the important factors behind making your decision? Share your experience in the comments section below.

Also read: Uncapped fees could be draining your super balance

Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

YourLifeChoices Writers
YourLifeChoices Writershttp://www.yourlifechoices.com.au/
YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.
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