Changing your superannuation during pregnancy

Last Updated on 23/07/2021 by Mandy

If you are pregnant, your superannuation savings may be at risk of fees and poor performance.

There is a good chance that the superannuation account which will support you through retirement was opened when you first started working. You have have even been contributing to this fund yourself. If you are planning to take time out to raise children, the question is whether it is time for you to review your account?

Fees on super accounts also reduce investment returns by an average of 0.65% per annum over a superannuation account’s lifetime according to research by super fund Mercer. Even just a few hundred dollars of superannuation fees could cause considerable pain further down the track when superannuation is converted into retirement income. And super accounts with higher balances are more likely to be subject to these fees. Even super accounts with balances as low as $2,500 can attract fees.

Managing superannuation fees during pregnancy is all about keeping them super low cost and checking who is offering their members the best deal. Super low cost means superannuation accounts that have low fees and great performance (which is regularly in the top quartile of the market). The difficulty with this strategy is that there are very few super funds that fit this description 100 % of the time. The Australian Securities and Investments Commission (ASIC) regulates superfunds to have super investment performance in the market top quartile in superannuation investment returns over a superannuation fund’s lifetime. ASIC regularly reports on the best performing funds.

For those who do not wish to spend time researching superannuation fund performance, it is recommended that a super account be chosen based on performance, fund fees, account service. If there is a super fund which fits your needs or better still super funds which fit your risk profile then check if you need to pay exit fees to move from your current super fund. Your super fund may even have a low fee option you can switch to, while you are not working. It’s always good to ask and know you have options to super low cost super fees.

What should I look for in a super fund during pregnancy?

– Low cost super accounts for women of child bearing age. Super funds that have superannuation accounts which have the lowest superannuation fees are well worth considering. These super funds may charge up to 40% less than other super funds and accounts. This low-cost super strategy in savings can save as much as $100,000 over a lifetime.

– Superannuation funds with performance in the top quartile of the market are also worthy of looking at as these funds tend to be above average when it come to super fund performance and superannuation fund service.

– Super funds that offer superannuation advice to super members should always be considered as it is one way of getting more super for your money when you manage super fees during pregnancy.  

Is there a risk in moving my super account while pregnant?

There are no penalties for changing super funds or superannuation accounts while pregnant, even if you are still working. As super is tax advantaged super savings, super fund members can move super and change superfunds irrespective of whether they work or not.

What happens to my super when I leave the workforce for pregnancy?

The superannuation guarantee (SG) rate will continue to apply to super superannuation accounts even after an individual leaves the workforce for pregnancy.

When are super superannuation accounts transferred to the ATO?

Super superannuation accounts with balances of $2,500 or less are de-registered from a superfund and moved to the Australian Tax Office (ATO) when a person reaches age 60.

Super superannuation accounts that have super balances of more than $2,500 remain with super super fund until an individual is over age 55 or they leave the workforce.

This super super strategy in savings can save as much as $100,000 over a lifetime for those who choose to leave super in low-cost super funds and accounts.