How many super accounts should I have?

One of the surprising things with superannuation is the lack of engagement people have with it.

It is not until retirement begins to appear on the distant horizon that many start to become more interested in how healthy, or otherwise, their retirement nest egg is looking.

One of the problems that has emerged with super over the years has been the proliferation of individual accounts. It was not uncommon for a person to have several individual accounts.

Each time a person changed jobs; a new super fund would be opened. This led to duplication of super accounts and with that, the duplication of fees and often, insurance cover.

However, in recent years the trend for people to have multiple accounts has been trending down which, for the most part, has been a good thing.

Recent changes to superannuation law now requires an employer to look for existing superannuation accounts before simply paying their new employees’ super to the employer’s default fund.

In addition, superannuation laws specifically require superannuation funds to identify and consolidate multiple superannuation accounts held by their members. This is referred to as intra-fund consolidation.

A recent review carried out by the Australian Securities and Investment Commission (ASIC) found that three out of nine trustees of superannuation funds did not have policies in place to identify members with multiple accounts. ASIC is working with super fund trustees to increase compliance in this area.

While the idea of consolidating super and eliminating multiple accounts will be desirable, there will be occasions where having more than one superannuation account is either necessary, or desirable.

Superannuation benefits will generally comprise of a taxable component and a tax-free component.

When it comes to estate planning, there may be value in making non-concessional contributions (which form part of the tax-free component) to a separate accumulation account thereby quarantining then from taxable superannuation benefits.

Often superannuation fund membership will include life and total and permanent disablement insurance cover. And, in many instances, this cover has been included without the need for the member to meet any medical requirements.

Therefore, for a superannuation fund member that has multiple superannuation accounts with embedded life insurance cover, and their health makes it unlikely they can obtain insurance either at all, or at an affordable price if they were medically underwritten, holding more than one superannuation account with life insurance attached can be a bonus.

There will be situations when consolidating superannuation accounts either cannot be done, or doing so would not be in a member’s best interest.

The obligations imposed on superannuation funds to consolidate their members multiple accounts into a single superannuation account may be contrary to some of the strategies that have been specifically structured to obtain a particular outcome.

With that in mind, it is important to pay attention to any correspondence you receive from your superannuation fund as reinstating a former situation, particularly if intra-fund consolidation has occurred, may be difficult and very time consuming.

Having a financial planner on your team can be worth its weight in gold when navigating the complexities of superannuation.


By Peter Kelly on 27 July 2023



Peter Kelly

PK believes people have the right to accurate, affordable and unbiased information that addresses all aspects of their preferred retirement lifestyle, thereby giving them the opportunity to make informed decisions that will empower them to live out their lives with dignity, certainty and security.

Mark Teale

Tealey’s ambition is to change how people think about their retirement, he wants people to dream, plan and realise retirement is not defined by a magical age prescribed by the legislation.


Copyright © 2021 Realise Your Dream

This is a publication of Alliance Wealth Pty Limited (AFSL 449221) and Professional Investment Services Pty Ltd (AFSL 234951), wholly owned subsidiaries of Centrepoint Alliance Ltd.

General Advice Warning
The information contained in this article is of a generally nature and does not take into account your particular objectives, financial situation or needs. You should therefore consider the appropriateness of the advice for your situation before acting on it. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decisions regarding any products or strategies mentioned in this publication.

While all care has been taken in the preparation of this blog, to the maximum extent permitted by law, no warranty is given in respect of the information provided and accordingly, neither Centrepoint Alliance Limited nor its related bodies corporate, employees or agents shall be liable for any loss suffered arising from reliance on this information.


Like This

Categories: Finance