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Financial Happenings Blog
Wednesday, April 04 2007

My previous employment was in the education sector and to my knowledge my previous employer did not offer choice of super.  It was my understanding that as a part of the relevant enterprise bargaining agreement, the choice of super was bargained away.


Since moving back to the finance sector I have come across the portability of superannuation benefit provisions which effectively give the opportunity for some employees who believe they do not have choice of super, the ability to re-arrange their superannuation investments into a fund that they, and hopefully their financial adviser, believes better meets their needs.


There are a range of specific conditions that must be met:

  • The fund that you want to transfer into is willing to accept the amount
  • If it is not the full balance of the current fund, and employer contributions are still being made into the fund, than at least $5,000 must be left in the current super fund
  • A 12 month period must expire between rollovers or transfers before another rollover or transfer can be made


The compulsory portability of benefits rules do not apply to:

  • Unfunded public sector superannuation schemes (Eg Q Super), Self Managed Super Funds or to member benefits paid as a pension
  • Defined benefit components of a superannuation interest in a defined benefit fund


Basically, if you hold an accumulation account and have a balance of more than $5,000 you can continue to receive regular employer contributions into the fund but once a year make a lump sum transfer into another fund which you feel better meets your needs.


I have since contacted my previous superannuation fund provider and they have confirmed that this is the case.  They also suggested that if a superannuation fund account holder was no longer having contributions paid into the fund but wanted to keep the insurance benefits they could do so by leaving $3,000 in the fund.


This provides a lot more choice and flexibility for people who may have thought that choice of super was not available to them.



Have a great Easter,


Scott Keefer


The information I have used has come from the 2006/07 Australian Master Superannuation Guide published by CCH Australia Limited.

Posted by: Scott Keefer AT 10:01 pm   |  Permalink   |  Email
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