Lost Superannuation: How Your Money is Being Lost

The Tax Department wants to give you money. No, it’s not a scam. It’s part of a concerted push to reunite lost, inactive and unclaimed superannuation funds with their rightful owners. If you’ve had several jobs, changed your name or address, chances are some of that $11.7 billion is yours.

According to the Australian Taxation Office (ATO), more than 6.3 million people, or 45% of the workforce, are unaware that they hold multiple super accounts. In fact the ATO’s database shows that 1.2 million people are members of three or more super funds.

How does super go astray?

With the average Australian having 4 to 5 jobs in a lifetime, that’s potentially 4 to 5 different superannuation accounts. It is not uncommon for people to open a new super account when they start a new job instead of taking their super fund with them when they change jobs.

People might also have super accounts which they have lost track of, for example, they may not have updated their contact details with their funds when they moved house – there are still $5.8 billion worth of accounts in this category. Or, they may have changed names to a married surname and lost correspondence with any number of super funds over the years.

Your super fund will report you to the ATO as a lost member if they have not been able to contact you, they have not received any contributions or rollover amounts for you in the last 5 years, or your account was transferred from another fund as a lost member account and no new address has been found.

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Where is all the lost super?

In August 2016, the ATO revealed the top ten postcodes with the most lost super.

Top ten postcodes with most lost super

Suburbs Postcode State Number of accounts $ Value of lost and unclaimed super
MacKay and surrounding areas 4740 QLD 2,605 49,256,340
Cairns and surrounding areas 4870 QLD 2,903 49,101,868
Toowoomba and surrounding areas 4350 QLD 2,384 45,276,433
Liverpool and surrounding areas 2170 NSW 2,120 37,714,680
Werribee and surrounding areas 3030 VIC 1,742 35,531,341
Sydney CBD 2000 NSW 1,867 35,055,841
Surry Hills and surrounding areas 2010 NSW 1,743 34,721,863
Gladstone and surrounding areas 4680 QLD 1,633 33,692,141
Bondi and surrounding areas 2026 NSW 1,689 32,960,830
Campbelltown and surrounding areas 2560 NSW 1,793 31,283,983

Source: ATO

As you can see, the area with the highest amount of lost super is Mackay and its surrounding suburbs in Queensland with a total of over $49 million.

ATO Deputy Commissioner James O’Halloran said this is just a small slice of the lost super across Australia.

“One of our key goals is to reunite individuals with their super and in the past financial year $2.5 billion has been consolidated into active super accounts,” he said.

“You might be surprised. A lot of people who worked casually while they were studying or worked multiple part-time jobs find super they had completely forgotten about.

“While some people purposefully maintain a number of accounts, a lot of Australians are unaware their hard earned super is unnecessarily being eroded away by fees.”

Why should I consolidate my super?

Forgotten super is money – your money – down the drain in administration fees and life insurance premiums. Even though contributions have not entered these accounts for many years, some funds continue to swipe administration and other service fees from the balances of inactive members. Inevitably, the balances of many accounts are reduced to a paltry sum because the investment assets and annual returns are not sufficient to cover administration and insurance costs. The waste is magnified when you consider that monthly insurance premiums also continue to be deducted until idle accounts run out of money and are closed.

Multiple unclaimed super accounts mean multiple annual fees are eating away at the principal. Canstar research illustrates this by looking at the two most vulnerable groups in our superannuation research, the ‘Starter’ and the ‘Builder’. We consider a Starter to be a young 25 year old with an average super balance of $25,000, while a Builder is 35 years of age and has an average balance of $80,000.

For a Starter, average yearly fees add up to $257 – the minimum is $105 and the maximum $732. A Builder can expect average fees to be $826 – minimum $360 and maximum $2,285. Even looking only at minimum fees charges annually, you can see the damage those fees will do to one or more lost super policies the longer they are left in the Lost basket.

How can I find lost superannuation?

It’s easier than you think to check if you have one or more super funds waiting to be claimed. As mentioned before, the Australian Taxation Office holds lost super and has set up a website SuperSeeker where you can do a quick search online by providing your name, date of birth and tax file number. Or you can provide the same details 24 hours a day on the self-help phone number – 13 28 65 Fast Key Code 1 then 2.

Both these methods provide good quick searches but you’ll get a more complete view of all your super by setting up a myGov account, the same one you use to do your tax return online. Your myGov account will show details of all your super accounts, including any you have lost track of or forgotten about. It also allows you to combine multiple super accounts by transferring your super into your preferred super account.

If you prefer to use snail mail, SuperSeeker has a special form you can download and use. Best of all, it costs nothing to search for lost super through the ATO’s SuperSeeker.  So it really is true – the Tax Department wants to give you money if you are the rightful owner, so what have you got to lose?

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