1 in 2 Australians who have been or are in employment have “lost” super and the dollar amount of that pool of money exceed $16 Billion.
So what exactly is “lost” super?
The superannuation industry considers a superannuation account “lost” when a contribution or rollover has not been made to the account for at least five years. This is often coincides with super funds losing contact with the account holder. Often account holders move to different jobs, change address or move overseas without informing the super fund.
It is common practice for super funds to inform the Australian Taxation Office (ATO) when this has happened. This is to benefit the account holder should they wish to find their lost super in the future. The ATO has a database of records for account holders to search for lost funds: http://www.ato.gov.au/Individuals/Super/In-detail/Lost-and-unclaimed-super/SuperSeeker/
However, not all super funds are prudent enough in informing the ATO in a reasonable time frame so it’s not fool proof.
Why is there so much “lost” super?
In my experience the most common reasons I hear are as follows:
- “I know I should do something about it but it’s too time consuming”
- “It’s too hard to move the funds over”
- “I don’t understand super so I just let the employer choose”
- “I’m too young to think about super, I will look at it another time”
- “It’s not money that I can use now so I didn’t bother looking into it”
- “It’s something that the employer does because they have to and I never look into it”
- “I don’t trust super funds and I expect there will be nothing left in the account when I retire”
- “The fees will be higher than any interest I earn so what is the point?”
- “It’s just another excuse for financial advisers to make commission so why bother?”
So what are the implications of ignoring your super?
- You could be paying for things you don’t need like excess insurance cover
- You may not have enough insurance
- You may be in the wrong investment choice for someone your age
- If you have more than one account, you will be paying more fees than you need to
- The ATO may garnish or take control of your super if you don’t take action
How can WealthPartners help fix it?
- We can explain how to track down lost super in depth
- Help you deal with the paperwork and deal with the super funds involved.
- The sooner you get it done, the sooner you will have your super in order.
- Let us get your garden in order then we can work out which plants you want to grow but that is a topic for next week…… How do I know which is the right super fund for me? Which investment choice is the best?
- In the meantime, if you want us to help you track down lost super, feel free to contact us
Corporate Services Specialist
Follow David on Twitter @DavidGLuciani
Factual information was sourced from the web links below