After years of working with people navigating job transitions, I’ve noticed that superannuation is often the last thing on someone’s mind when they hand in their notice. The focus is usually on the new role, the salary bump, or escaping a difficult workplace. But superannuation doesn’t pause when you do. It fragments, and those fragments accumulate in ways that most people don’t fully understand until they’re much further down the career path.
The basic mechanism is straightforward: when you leave a job, your employer stops contributing to your super fund. Your balance sits where it is. When you start a new job, your new employer opens a new super account and begins contributing there. That’s not inherently a problem – you end up with multiple accounts, each with its own balance. The real issue emerges over time, and it’s less about the mechanics and more about the friction.
The Accumulation Problem
Having multiple super accounts isn’t just untidy. Each account carries its own administration fees, investment fees, and sometimes insurance costs. These aren’t massive in isolation, but when you have four, five, or six accounts across your working life, the compounding effect becomes significant. I’ve seen people in their 50s with seven different super accounts, each charging between $100 and $300 per year in fees alone. That’s money that should have been growing through compound interest instead being paid to fund administrators.
The fee structure varies by fund. Some charge a flat annual fee regardless of balance. Others charge a percentage of your balance. A few have tiered structures that penalize smaller accounts more heavily. When your balance in one account is $8,000 and you’re being charged $150 annually, that’s a 1.875% annual cost before you even consider investment performance. In a fund charging 1% in investment fees on top of that, you’re looking at nearly 3% in annual costs on a small balance. That’s a significant drag on growth.
Insurance and Inactive Accounts
Another layer that people rarely consider is insurance. Most super funds include default insurance – life cover, disability cover, or both. When you leave a job and that super account becomes inactive, the insurance typically continues. You’re paying premiums on cover you may not need or may not be aware you have. Some funds will eventually close inactive accounts or move them to a default fund, but the process varies, and the timing is often unclear to the account holder.
I’ve encountered situations where someone had three old super accounts they’d completely forgotten about, each still charging insurance premiums on a balance that hadn’t moved in years. When they finally consolidated, they discovered they’d been paying for insurance across all three accounts simultaneously. It wasn’t a catastrophic amount, but it represented unnecessary leakage.
Lost Accounts and Administrative Friction
The longer you work and the more jobs you change, the higher the risk of losing track of an account entirely. People move house, change email addresses, and forget which fund they were with at a particular employer. The Australian Taxation Office (ATO) maintains a lost members register, and there are mechanisms to find old accounts, but it requires active effort. Many people simply don’t do it.
When an account becomes truly lost – not just inactive, but actually forgotten – it sits dormant. The fees continue. The insurance continues. The balance doesn’t grow. Years later, when someone finally consolidates their super, they might discover an old account they’d written off mentally, only to find it’s been eroded by fees and inactivity.
Consolidating accounts isn’t automatic. You have to actively request it. Some people consolidate regularly; others consolidate once, years later, and discover the damage. The friction here is real. It requires making phone calls, filling out forms, and understanding which account to consolidate into and which to close. For someone who’s changed jobs five times in ten years, that’s a non-trivial administrative burden.
The Investment Continuity Question
Each super fund has its own investment strategy and default allocation. When you move jobs, you move to a new fund with potentially different investment options and different default settings. If you’re not actively choosing your investment mix – and most people aren’t – you end up with fragmented investments across different funds, each with their own risk profile and performance.
This isn’t necessarily harmful if all your accounts are in balanced or growth options. But I’ve seen cases where someone’s old accounts were in conservative options while their current account is in aggressive growth, creating an unintended and unmanaged asset allocation across their total super. It’s not a disaster, but it’s not intentional either, and it represents a lack of coherence in long-term planning.
Some funds perform better than others, and some have lower fees than others. When you have multiple accounts, you might be holding money in a relatively expensive or underperforming fund simply because you haven’t consolidated. The opportunity cost compounds over decades.
When Frequent Changes Matter Most
The impact of frequent job changes on super is proportional to how frequently you change and how long you work. Someone who changes jobs every 18 months for 40 years will accumulate vastly more accounts than someone who changes jobs three times in a 35-year career. The person with frequent changes faces a much steeper consolidation challenge and a longer period of fee drag.
Early career job changes are particularly common. People move between roles as they figure out their direction, chase better opportunities, or escape poor situations. This is normal and often necessary for career development. But the super fragmentation that results is a cost that’s paid silently over decades. A 25-year-old who changes jobs four times by age 35 might not feel the impact until they’re 55, when they suddenly realize they have six accounts and the consolidation task feels overwhelming.
The financial impact also depends on the size of your balances. If you’re moving between entry-level roles with small contributions, the absolute dollar cost of fees is lower, but the percentage impact is higher. As your balances grow, the absolute cost increases, but so does the opportunity cost of that money not being invested effectively.
Staying aware of your super accounts and consolidating them periodically – every few years rather than waiting until retirement – is the practical response. It requires minimal effort at the time but prevents a larger administrative and financial problem from building. The people I’ve worked with who maintain a clear picture of their super across job changes tend to have less friction in their retirement planning and fewer surprises when they finally consolidate everything.
