With Australia’s workforce becoming increasingly part-time or casual, people can expect to have many different jobs during their working lives.
It’s easy to lose track of superannuation accounts, particularly when your Superannuation Guarantee funds were deposited into different employer-nominated accounts. The majority of employees do not select their own superannuation fund, but leave it to default to the employer’s choice.
The Australian Taxation Office (ATO) estimates that Australians are owed a combined $12 billion in lost super money, so it’s worthwhile checking to see if some of it is yours.
Superannuation was established to help or totally fund retirement, and you may be relying on it to provide a nest egg for 30 years after you retire, at a time when there is no certainty about the affordability of age pensions.
Consolidation of super accounts
First, before searching for lost superannuation, consider whether you should consolidate your accounts. Many Australians are paying unnecessary fund management fees and insurance premiums on multiple small accounts, so it makes sense to find and consolidate the money in one superannuation fund to minimise fees and maximise returns.
Before rolling small funds over, check if exit and entry fees apply. Ensure your current employer will pay your superannuation entitlement into your preferred fund.
In addition, compare fees in all accounts before transferring the funds. Even a small percentage increase could lower your retirement savings considerably over time. You may have your chosen account for 50 years or more.
Finding lost superannuation money
While many lost super accounts hold small amounts of a few hundred or a few thousand dollars, the ATO says the average ‘lost’ account holds about $10,000. In 2015, one person reclaimed almost $1 million. If you find you are entitled to reclaim a large sum of lost super, it is worthwhile seeking independent financial advice before deciding how to manage it.
The easiest way to determine if you have more than one active super account is to create a myGov account (or check an existing account) on the myGov website. The ATO section will detail all accounts held in your name and you can then apply to roll over old or small funds into your preferred super account.
To search for lost super, you can fill out the ‘Searching for lost and unclaimed super’ form from the ATO’s website. Note that some websites still advise using the SuperSeeker online service to search for lost funds. The ATO advises that this service is no longer available and that myGov is the best place to begin searching.
You can also ask your primary super fund to assist you to track and claim lost funds. Most will do this without charging a fee provided the money is rolled into one of their funds. In this case, you authorise your fund in writing to contact other superannuation funds and ask them to transfer your money into your preferred account.
Sometimes, not all of your super will be held in an active fund account. This inactive money is held by the ATO, but is still yours and you can reclaim it. Since 1 July 2013, you will also receive interest on reclaimed money.
Super can be deemed ‘lost’ if your fund has been unable to contact you or the fund has not received contributions or rollover funds for your account in the past five years.
Twice each year, superannuation funds report and pay lost money to the ATO, which holds:
- Unclaimed super money for members aged 65 years and older, non-member spouses and deceased members where the fund has been unable to find current contact information.
- Unclaimed super money of former temporary residents
- Lost accounts with small balances
- Accounts that have been inactive for a period of five years and have insufficient records to ever identify the owner of the account.
In the case of a deceased member, a beneficiary is still entitled to reclaim any lost funds. If the deceased person did not name a beneficiary, the funds will be paid to the estate for distribution by the trustee.
Finding and claiming your lost superannuation is free, although there are many services that offer to track your superannuation for a fee. It’s better to at least start the process yourself, and then perhaps discuss with your superannuation fund or adviser on the appropriate next step to consolidating it.
Have you checked to see if you have lost superannuation to claim?