What to consider before switching super funds

Font Size:

The new year is the perfect time to get your financial affairs in order.

You probably have some time off work and might be less than satisfied with the way your fund handled the financial fallout of the COVID-19 pandemic.

There are, however, a few things that you need to consider before jumping across 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 fund performance and fees against other important considerations.

Make sure you are comparing apples with apples.

Firstly, make sure that you are comparing a balanced option against another balanced option, assuming that you are happy to stay with the same risk profile you adopted when you first chose your super fund.

Even 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. Given the nature of 2020, your fund may have suffered one bad year, but when you look at its five-year performance, you may be better off sticking with what you have.

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

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
Some of the other things you may like to consider are the services offered by the funds you are comparing, such as financial advice, etc.

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?

Join YourLifeChoices today
and get this free eBook!

By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy


What are the options when facing unemployment later in life?

The recession caused by the pandemic is making life uncertain for many older Australians.

How to give retirees the confidence to spend

An efficient retirement spending system is still a work in progress, writes Andrew Boal.

The card that entitles you to $500

YourLifeChoices keeps you up to date with changes that could affect your retirement.

Written by Ben


Total Comments: 1
  1. 0

    And don’t forget to ask them to transfer your insurance. I failed to do this and it took me a while to realise it wasn’t transferred.



continue reading


Five smart moves for empty nesters

So, the kids have moved out, your home is finally yours again and you have ascended to the rank of...


Why you turn down the radio when you're trying to park your car?

When you're looking for a destination, you might need to cut down the volume. Shutterstock Simon Lilburn, University of Melbourne...


Why we can expect smarter healthcare in 2021 and other tech trends

With last year dominated by the COVID-19 pandemic and much the same expected for 2021, it is unsurprising that healthcare...

Mental Health

Drug trial offers rare hope on Alzheimer's disease

There is finally a glimmer of hope in the fight against Alzheimer's, the most common form of dementia, which affects...


How the pandemic has turbocharged the pet care industry

Pet care is a big business, and the pandemic has made it bigger. An Animal Medicines Australia report says Australians...

Travel News

Australian government divided on lifting overseas travel ban

The federal government is divided about when international air travel will recommence for Australians, as consumers signal their intent to...


Dietitian reveals the breakfast swaps worth making

If you're looking to live a healthier lifestyle, breakfast is a good place to start. It's the first meal of...

Finance News

COVID driving more older Australians into poverty

Many of us who endured lockdowns in Australia are familiar with the surge in energy bills at home. But for...