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Bill Savellis

Unclaimed Superannuation Funds

by
in Legislative UpdatePersonal Financial Advice
07 Apr 13  |  0 Comments

How do you lose $19 billion? Apparently it is quite easy if Australia’s lost and unclaimed superannuation is anything to go by.

As at June 2012 there were almost 32 million superannuation accounts in Australia, which is almost three accounts for every worker and with the new ‘lost super’ laws introduced last year, these lost superannuation funds will be transferred to the government which will fill it coffers by an estimated $10 billion (that’s $10,000,000,000) over the next 5 years.

Most people end up with multiple super accounts because they have allowed their current & previous employers to dictate where their super is paid. This is one of the main reasons people end up with lost super, and when people change employers they tend to just go along with the new default fund set up by their new employer.

Its a cycle that continues to repeat, and people can (and do) end up with numerous super accounts all over the place. If you factor in the compounding effect of money then this could effectively cost people tens of thousands of dollars (if not hundreds of thousands of dollars) – money that would otherwise be used to fund their retirement.

WHAT ARE THE NEW RULES?

Three key changes to the lost super rules explained above were announced however, when the Federal Government released its 2012/2013 Mid-Year Economic and Fiscal Outlook on 22 October 2012.

From 31 December 2012 onwards, more lost super accounts will be transferred to the ATO because:

  • A ‘lost’ super account holding less than $2,000 will be sent to the ATO as unclaimed superannuation money. The current rules only require lost accounts to be sent if they hold less than $200.
  • A lost super account that has been inactive for 12 months and there is no possibility that the super fund will be able to pay the lost member, will be sent to the ATO. The current rules require the account to be inactive for 5 years.
  • From 1 July 2013 onwards, ‘interest’ will be paid at a rate equivalent to the rate of inflation – Consumer Price Index (CPI) on all lost superannuation accounts reclaimed from the ATO. Currently, no interest is paid on unclaimed superannuation monies, although if that super account had remained with the super fund, then you could have expected investment earnings less fees.

If you need any form of assistance or advice regarding Finding Your Lost Super, complete the enquiry form  and speak to our experienced Financial Advisors.

 
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