Proposed Merging Superfund

James Murphy Tax


My client has a superannuation fund with defined benefits and member contributions with an employer.

The employer proposed to merge with another super fund with an accumulation merger fund.

My client question from me is :

What is advantage and disadvantage of merging proposed fund?


We assume your client has a choice.

Usually, a defined benefit fund has a formula that determines your final benefit, rather than an investment return.

This could be a percentage of your final salary.

Most super funds of this type are corporate or public sector funds with many closed to new members.

Usually, employers are keen to get super members out of defined benefits into accumulation funds.

Your client needs to see a financial planner.

It will be necessary to determine how good the defined benefit is compared to the accumulation amount on offer.

Other factors will include the client’s health, years to retirement, risk profile, and financial needs.

Your client needs to make a considered, informed decision after weighing up all the benefits.