Date issued: 31 May 2007

CPA Australia says that there are many benefits to consolidating multiple superannuation accounts into one; a reduction of paperwork, less fees payable, and if you act before 1 July 2007, less tax charged on your superannuation benefit when it’s paid in the future.

As part of the upcoming 'Better Super' changes, the existing tax-free part of your superannuation benefit will be fixed, or 'crystallised', as at 30 June 2007 and will only grow if additional personal contributions are made in the future. The crystallised component is made up of personal contributions, that part of your benefit attributable to pre-July 1983 service and any other concessional components.

The pre-1983 component is calculated based on the period from your earliest employment or superannuation fund membership date to 30 June 1983.  The earlier the date, the greater the pre-1983 component. If a superannuation benefit with an earlier eligible service date is rolled into a fund with a later start date, even one after 30 June 1983, the earlier date will apply to the whole benefit, resulting in a much greater pre-1983 component and hence tax-free component of your superannuation benefit.

CPA Australia Superannuation Policy Adviser, Michael Davison said consolidating all your superannuation accounts into one means the earliest start date can be applied to all your superannuation, even amounts that have accrued since June 1983.

'This is the last opportunity to maximise the tax-free component of your existing superannuation,' Mr Davison said.

If you've had more than one employer, you may have more than one superannuation account. The end of the financial year means you’ll soon be receiving an annual statement from your superannuation fund.

'If you receive multiple annual statements, that means you have multiple superannuation accounts and are likely paying duplicate fees. This can make it difficult to keep track of your super and may mean that you're paying unnecessary duplicate fees which eat into your savings,' Mr Davison said. 'Now is a good time to consider consolidating your super accounts to ensure you are minimising the fees you pay and are getting the maximum benefits,' Mr Davison said.

'Superannuation is possibly your greatest investment. As it forms an important part of your retirement plan, you should have clearly defined superannuation saving goals. Familiarise yourself with your existing funds to decide which, if any, best suits your needs and then look to transfer all your superannuation accounts into the one.

'Do your homework when comparing funds. You should consider a number of issues, including fees and changes, death and disability insurance, the range of investment options, and performance of the fund over the last few years,' Mr Davison said.

Contact your primary superannuation fund, once the decision is made, and they’ll assist you transferring your other accounts. From 1 July 2007, funds must transfer your benefit within 30 days of your request and will provide you with a standard form to assist with the process.

If you are unsure whether to consolidate your super, consult a CPA Australia financial adviser.

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