According to the Australian Taxation Office (ATO), approximately six million superannuation accounts or “supers” were “lost” in 2014. The accounts were valued at more than $16 billion. (1)
These accounts, however, can be “found.” The proper account holder merely needs to claim the account. There is a chance that you have a lost super that you don’t know about. (2)
There are a lot of Australians who own more than one superannuation account. Each of these funds has its own charges and fees. According to our parent company, AMP Capital, you may have money scattered across multiple supers, both active and lost. This could cost you thousands of dollars over the part of your lifetime you spend working. The good news: you can save thousands of dollars by finding a lost super or supers and consolidating them into one account. (2)
How Superannuation Funds Become “Lost”
When you change jobs or even your address, you can lose track of your super fund. If you have had to move around from job to job, it is easier than you think to lose track of one or more supers. However, there is a system in place to help you. Your super fund will report you as a “lost member” to the ATO under three circumstances:
They lose contact with you.
They have received no contributions or rollover funds from you for a period of five years.
Your super was shifted as a lost member account from another super but the current super can’t contact you. (2)
When a Superannuation Fund Becomes an “Unclaimed Super”
In the cases we described above, the money stays with the super fund and the ATO keeps a record of the fund. That is called a “lost super.” However, there are also circumstances where the money in the fund is required to be transferred to the ATO. If the funds are transferred to the ATO, the super becomes an “unclaimed super.” (2)
There are a number of circumstances in which lost super accounts are transferred to the ATO. For example, if the amount of money in the lost super is less than $2,000, no money has been added to the super for more than one year and the records are not sufficient to provide positive identification of the account’s owner, the fund is transferred to the ATO and stays there until it is claimed. (2)
The Benefits of Finding a Lost Super
There are considerable financial benefits to finding your lost super. It will enable you to consolidate your supers into one super account. This can save thousands of dollars in fees and charges over the period of your life in which you are working. Remember that every super charges its own set of fees; consolidation makes financial sense. (2)
While many people tend to dismiss a lost super as only containing a small amount of money and therefore not worth their time, these people are ignoring the benefit of compound interest. Even a small amount of money can grow exponentially over an entire working life due to compound interest. (2)
Another benefit that can be huge: consolidating your super makes it easier to track your finances. It also enables you to make sure all of your super is invested in the fund you choose. When your money is sitting with the ATO or in a lost super, you have no control over it. However, if your money is all available to place in a fund of your choosing, you can choose the fund that will best suit your individual needs and goals. (2)
How to Find a Lost Super
It can take considerable time and “legwork” to find a lost super. One way is to contact every employer you ever had and find out if they have a records of super funds in your name. Your super may be with the ATO or an individual state or territory. It is up to you to contact each relevant agency. (2)
You could also contact the Australian Securities and Investments Commission (ASIC). Once you have found each account, you can then consolidate them. (2)
The Easiest Option?
You can arrange for an individual consult at Approved Financial Planners. We can help you use the free AMP Capital Super Search and Consolidate Now tools and provide expert, professional superannuation advice. Call us today: 08 6462 0888.
(1) Australian Taxation Office–Research and statistics. Super accounts data overview, 2015.
(2) AMP Capital. How do I find my lost super? https://www.amp.com.au/personal/super-and-retirement/services/find-lost-super