What happens to your super when you resign?

Building your super is one of the easiest and best ways to secure your retirement fund. When you’re employed, your employer is required to regularly contribute to your super, giving you an extra boost to grow it bigger and faster.

However, there may come a time when you need to leave your job for another or to start a company of your own. Whichever it may be, it’s best for you to know what happens to your super once you leave your current employer.

Leaving your job


As an employee, you usually have the power to choose where your employers should put their contributions to your super. The same process applies when you switch jobs. You can keep using your current plan as long as your new employer can do the contributions into that super or you can move to a new fund and transfer your current super into it.

Your super fund where your employer puts in their contributions may belong to an ‘employer-sponsored’ category. This special division typically has benefits that are exclusive only to employees working for the said employer. This means that if you resign, your super will be transferred to another plan and you may lose the benefits enjoyed under the employer-sponsored division.

Remaining in your current super fund even after leaving your employer doesn’t guarantee that your benefits from that super will be retained. There’s a possibility that your new employer can’t contribute to your current super due to legal restrictions. In this situation, you’ll be forced to choose a different one or create a new account which may mean new fees and premiums.

Your super will be automatically transferred to a new plan if you don’t keep track of it and give them a decision within a specific deadline. Some super base their transfer process on the amount your current fund holds.

For example, if you have a balance amounting to more than $5,000, your account can be retained in your current plan. If your account contains less than this amount when you change your employer, you’ll be transferred to a personal plan.

Some super plans allow you to retain most of the benefits you receive when you were with your last employer. You will have the same ATN, investment options, rebates and discounts, and insurance coverage for death and disability. Even the perk of getting free financial advice may be retained by your super fund manager.

This is not always the case, though, which is why you must consider all points related to switching your super account.

Things to consider when switching your super


An employer-sponsored super have a lot of benefits that other plans fail to offer. This is why when you’re planning to resign from your job, you should consider some of the possible drawbacks associated with switching into a different super.

-          Higher management fees and insurance premiums since your employer doesn’t subsidize these anymore.

-          The new account may have different investment options, resulting in an altered risk-reward ratio.

-          It’s possible for your life insurance coverage to be stopped entirely.

You may also have to pay capital gains tax liability when you switch from one super to another plan. If your investments in your current super have capital gains, it will be taxed accordingly before it’s transferred to the new plan. This means your new account balance will be lower than the current one you have.

When you change jobs, you’ll usually be removed from your employer-sponsored super and transferred to another plan. You’ll also have to consider the transaction costs involved in the purchasing and selling of the assets under your current super.

If there’s an option to retain your current plan and have your new employer contribute to it, then that will be for the better. Still, you may have to deal with a different fee structure on your super fund the moment you lose your current job. They may be under the same super fund handler but your fund might be placed in a different division that’s not employer-sponsored.

Super funds will notify you of any changes before the transfer to another plan occurs. To be safe, always monitor the fees and other costs involved in maintaining your super. A slight difference in percentage can equate into a big chunk of money lost in the long run.

The best way to avoid hiccups and pay extra fees is to consult your super fund before you leave your employer. Include this process in your action plan before submitting your resignation paper to your current employer.



Whether you’re switching to a new job or not, it’s always good practice to keep track of your super funds. Make sure you also maintain only one super to avoid paying multiple premiums and fees. Check what is covered in your insurance policies when you switch plans. At the end of the day, it’s your responsibility as a super holder to decide how your money should be handled.

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