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.
