Could You Discover a Missing Fortune?
Nobody wants to throw away money but when it comes to superannuation, life sometimes just gets in the way.
You may change jobs and start up and use a different superannuation account, move overseas and forget about an old account, or simply lose track of an old account or two after changing address a few times.
Whatever the reason, it is certainly worthwhile taking a bit of time to find out if you have a missing superannuation account that might well have blossomed into something worthwhile and meaningful in the years it has remained lost.
An Astounding $16 Billion of Lost Super
A staggering $16 billion is defined as lost and unclaimed superannuation savings which is not surprising given that one in four workers hold two or more superannuation accounts.
This lost and unclaimed superannuation can usually be found in one of two places, the original super fund into which it was deposited or with the Australian Taxation Office which is tasked with the job of sweeping up inactive super accounts.
According to the Australian Taxation Office, the pool of missing super savings grew by $2.1 billion since the last financial year, so this is not a problem that is going away.
The best way to find missing superannuation account used to do a search on the government’s my Gov platform.
Discovery and Consolidation Is Not Difficult
Once discovered, consolidating your accounts is not a difficult task and is often best handled by informing your main superannuation account and filling out a form with them to allow the accounts to be brought together.
The breakdown of lost super accounts is that about $10.4 billion of them are held by super funds with the ATO having the remaining $5.6 billion.
Despite many campaigns to reunite people with their lost super, the total amount continues to increase every year.
Unclaimed super money ends up being transferred to the ATO when it meets criteria such as being part of an inactive low-balance account.
ATO Doing Its Part in Repatriation
The ATO might also hold unclaimed super for members who are 65 or older, or super for temporary residents who have left Australia for six months or more and their visa has expired or been cancelled.
All lost member accounts with balances of $6,000 or less are transferred to the ATO.
The ATO helps super account holders from completely losing touch with their super and to avoid unnecessary fees but there are limitations, with super consolidation a much better choice because it allows super members to choose an appropriate investment risk level for their nest egg.
Due to tax file number matching and other strategies, the ATO has managed to help to consolidate 4.7 million accounts since 2019 worth around $7.1 billion but there is still a long way to go.
Many Australians Have Duplicate Super Accounts
A surprisingly high 23% of Australians have two or more super accounts, which is a big contributor to the problem of losing track of your money.
A study by the Productivity Commission estimated that about one in three super accounts are “unintended multiples”, which often start when employees change jobs but fail to close or merge previous accounts.
Apart from the issue of choosing an appropriate individual investment risk, having multiple accounts is also a wealth hazard because it involves paying multiple investing and account keeping fees, which can add up to many hundreds of dollars a year, depending on the individual super fund.