The Real Cost of Having Multiple Super Funds
If you've worked more than one job, there's a good chance you've got more than one super fund. It happens easily — a new job opens a new account, you forget to roll the old one over, and over time, those small balances sit scattered across different funds.
The problem? Every extra account means extra fees, insurance premiums, and missed returns. It's a slow leak that can quietly drain tens of thousands from your retirement savings without you even realising.
The Numbers Tell the Story
Recent ATO data shows that as at 30 June 2024, around four million Australians have two or more superannuation accounts. That represents a significant portion of the working population dealing with duplicate accounts.
According to earlier research, approximately 18% of Australians have 2 accounts, 4% have 3 accounts, and 1% have 4 or more super accounts. While the introduction of super stapling in November 2021 aims to prevent new duplicate accounts, millions of Australians still carry multiple funds from their earlier working years.
The 2018 Productivity Commission report estimated that more than a third of all super accounts were unintended multiple accounts, costing Australians approximately $2.6 billion every year in fees — and that figure doesn't even include duplicate insurance premiums.
The Hidden Impact of Duplicate Fees
Each super account charges ongoing administration and investment fees. These may look minor on paper — but when multiplied across several accounts, they quickly add up.
A real-world example:
Let's say each fund charges $150 per year in admin fees and you have three accounts. That's $450 annually just in administration costs. Over 25 years, that's more than $11,000 in fees alone — before even factoring in the investment growth you've missed on that money.
And because every dollar you lose in fees is a dollar that's not compounding, the long-term impact is magnified substantially. When you consider foregone investment returns on those fees over decades, the true cost becomes even more significant.
Small balances across multiple funds also tend to earn less, especially if some accounts sit in low-growth or conservative default options that may not align with your age or risk profile.
Duplicate Insurance — The Cost You Don't See
Many Australians don't realise they're paying for multiple insurance policies inside their super — often covering the same risk. Life insurance, Total and Permanent Disability (TPD), and income protection insurance are commonly bundled into default super accounts.
You might assume more cover equals more protection, but that's not how it works. Holding duplicate policies can lead to:
Paying multiple premiums for similar cover — insurance costs can range from a few hundred to several thousand dollars per year, per account
Potential claim complications if multiple insurers are unaware of each other, which can delay or complicate payouts
Zombie insurance — some types of insurance, like income protection, can typically only be claimed through one policy, meaning you could be paying for cover that will never pay out
Losing valuable cover if you consolidate without properly reviewing policy terms
The Productivity Commission identified that duplicate insurance is a major contributor to the billions lost annually through multiple accounts.
Important consideration: Before closing any fund, carefully review the insurance benefits attached. Some older policies — particularly those established before stricter underwriting rules introduced in recent years — can be difficult or impossible to replace once cancelled, especially if your health has changed or you've aged.
Missed Investment Growth
When your super is spread across several funds, each balance is likely smaller and sitting in separate investment mixes. This makes it harder to manage your overall strategy and often means some funds are underperforming.
Consolidating your accounts allows you to:
Implement a single, coherent investment strategy that matches your goals, time horizon, and risk tolerance
Benefit from compound growth on a larger balance — a single $100,000 balance will typically grow faster than five separate $20,000 balances in different investment options
Reduce administrative complexity and keep all contributions working together in one place
Monitor performance more effectively with a single account to track rather than multiple statements and logins
Even modest improvements in performance on a larger consolidated balance can make a material difference to your retirement outcome. For example, an extra 0.5% return per annum on a $100,000 balance over 20 years could add approximately $11,000 to your final retirement savings.
Real Consequences: Recent Regulatory Action
The serious impact of multiple accounts was highlighted in January 2025 when AustralianSuper was fined $27 million by the Federal Court for failing to merge duplicate member accounts.
The case revealed that approximately 90,700 members held multiple accounts that should have been merged between July 2013 and March 2023. These members incurred approximately $69 million in losses through multiple administration fees, insurance premiums, and lost investment earnings.
While all affected members have been remediated, this case demonstrates just how significant the financial impact of duplicate accounts can be — and why consolidation matters.
How to Consolidate Your Super
In 2025, consolidating super is simple, secure, and free through the ATO. Here's how to do it properly:
Log in to myGov and link your ATO account if you haven't already
Navigate to Super → Manage → Fund details to view all funds held in your name
Review each account carefully before making any changes:
Compare administration and investment fees
Check insurance cover levels, premiums, and policy terms
Review investment options and recent performance
Note any exit fees that may apply
Select your preferred fund — typically the one with the best combination of performance, fees, and features for your situation
Request consolidation through the ATO portal — the transfer usually completes within a few business days
The ATO handles the transfer process, contacting your old providers on your behalf. You'll receive confirmation once the consolidation is complete.
Important: If you have a defined benefit fund (often through public sector employment), seek professional financial advice before consolidating. These funds offer guaranteed benefits that cannot be recreated once closed and may provide superior retirement outcomes compared to accumulation funds.
The Super Stapling System
Since November 2021, Australia has implemented "super stapling" to prevent the accumulation of new duplicate accounts. Under this system, your existing super fund is "stapled" to you and should follow you from job to job.
When you start a new job and don't nominate a super fund, your employer must check with the ATO to see if you have an existing account. If you do, they must pay your super into that stapled fund rather than opening a new account.
However, stapling doesn't fix existing multiple accounts — you need to actively consolidate those yourself.
Why It Matters
Consolidating your super doesn't just tidy up your finances — it directly improves your long-term outcomes:
Eliminate unnecessary fees that compound negatively over time
Stop paying for duplicate insurance you don't need or can't claim
Simplify your financial life with a single account to monitor
Improve investment outcomes with a coherent strategy and larger balance
Make better decisions when you can see your full super picture in one place
The difference can be substantial. The Productivity Commission found that members who maintained unintended multiple accounts throughout their working lives could end up with retirement balances up to 40% lower than they otherwise would have achieved.
Key Takeaway
Multiple super funds might sound harmless, but over time, they can significantly erode your retirement balance through fees, insurance costs, and suboptimal investment outcomes. With around four million Australians currently holding multiple accounts, this remains one of the most common — and costly — mistakes in retirement planning.
Consolidation through the ATO's online tools is straightforward and free, but it's not always the right move for everyone. Before consolidating, carefully review your insurance cover, investment options, and any unique fund features you may lose.
Disclaimer: The information provided in this blog is for general informational purposes only and does not constitute financial, tax, or investment advice. We recommend speaking with a qualified financial adviser before making any decisions regarding your superannuation. Every individual’s financial situation is unique, and personalised advice is essential to ensure the best outcome for your specific circumstances.
