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If you’ve ever changed jobs, address or your name then there is a chance you are one of the almost 2.3 million Australians with three or more super accounts, contributing to $17.5 billion in lost or unclaimed super across Australia.
This is not just an administrative problem. If you have several super accounts it could mean you’re paying multiple fees and charges, which may significantly reduce your overall retirement income.
What is lost and unclaimed super?
Many people lose track of their super simply because of a change of job or from moving their home, or a combination of the two.
Funds must, twice a year, report superannuation as “lost” to the Australian Tax Office (ATO). The definition of lost includes situations where you are uncontactable at your current address and you have made no contributions or rollovers into the account for the past 12 months.
Unclaimed super is different to lost super and refers to super that is eligible to be withdrawn but the fund has been unable to contact you.
How do I find and consolidate my super accounts?
Transferring all your super into one fund is usually an easy process, but you should first check the details of each fund you have, so you can decide which one is best for you. It’s also important to check if there are any exit fees and which insurances are attached to each one.
ASIC’s MoneySmart website makes this suggestion: “When consolidating your super, don’t just choose the fund with the highest balance. The best fund for you may be one of your small accounts, or a completely new fund.”
The easiest way to consolidate super accounts is through the myGov website. According to the ATO, between 1 July 2013 and 30 June 2018 more than 2.2 million accounts worth $11.3 billion have been consolidated or transferred by fund members using myGov.
Follow the steps below to find and consolidate your lost super.
- Log in or create a myGov account
- Link your myGov account to the ATO
- Select “super”
- If the ATO has a record of your super funds you can then find and choose to transfer your super to another account
- Make sure you check if there are exit fees or if you will lose any insurance coverage
Note: You can also refer to our guide on comparing super funds.
The ATO have also produced this video guide explaining why it’s important to combine multiple accounts, and how simple the process can be through myGov.
You can also check by phoning the ATO directly on 13 28 65.
It also may be worth searching on AUSfund – which is a special type of superannuation fund known as Eligible Rollover Fund. It’s purpose is to look after money transferred from other regulated superannuation funds because a member has become lost or inactive. More than 35 super funds transfer their members’ inactive and unclaimed accounts to AUSfund.
It should be noted that AUSfund does not provide insurance cover, cannot accept any type of member or employer contribution and does not offer investment choice.
If you still can’t find your super that you think you may have, it may be worth contacting the employer who made the super payments to see if they have any records of it. Your super fund may also be able to help you.
Once you’ve done this, it’s important to make sure your super fund has your tax file number and your current address.
Why is it important to find your lost or unclaimed super?
According to the Productivity Commission (PC), the Federal Government’s peak economic adviser, more than a third of all super accounts are unintended multiple accounts, which are unwanted and unneeded, and these cost a total of $2.6 billion every year in fees.
The PC estimates there could be as many as 10 million unintended multiple super accounts, which is 35 per cent of all member accounts held by funds, associated with $690 million and $1.9 billion annually in excess administration fees and insurance premiums, respectively.
Total accounts and average accounts per member, 2000–2017
Source: ABS, APRA, ATO, Productivity Commission, 2018
The costs are exacerbated by foregone compound returns. The PC’s draft report on Superannuation: Assessing Efficiency & Competitiveness, released in April 2018, cited an example in which a worker with two accounts across their working life will be over 6 per cent (or $51,000) worse off at retirement compared with a worker holding just one account.
The ATO has revealed the total amount of lost and unclaimed super was reduced by more than $420 million in 2017-18 but there is still $17.5 billion waiting to be found, across more than 6.2 million accounts. The ATO says one New South Wales account has more than $2.2 million waiting to be found.
Not surprisingly, as Australia’s most populous state, New South Wales has the most number, and highest value, of lost and unclaimed super with just under a million accounts holding nearly $5 billion in assets. Victoria has more than 600,000 accounts holding $3.5 billion. Queensland has more lost and unclaimed accounts than Victoria, but the total value is $3 billion.
Lost and unclaimed super by state as at 30 June 2018
|State||Number of lost super accounts||Value of lost super accounts||Number of unclaimed super accounts||Value of unclaimed super accounts||Total number||Total value||Average value|
How do people end up with multiple accounts?
Many people often lose contact with their super funds when they change jobs, move house, or simply forget to update their details.
People also often get a new super account each time they change their job and they let their new employer choose the fund. This also contributes to the high number of multiple accounts, and why so many super accounts go missing.
It appears that the trend towards members holding multiple accounts begins to kick in at a young age, between 18 and 25, and this is probably a reflection of the fact that, at that age, many people have just started their working careers and are changing jobs to gain experience and get ahead. Some may have also relocated to take on new positions.
However from the age of 46, the trend is towards consolidation of super accounts into a single fund, perhaps as people start to think ahead to what’s going to happen in retirement.
Percent of members by number of accounts by age group
Source: ATO, Productivity Commission, 2018
What is the potential cost of having multiple super accounts?
Quite simply, too many super accounts can mean too many fees which eat into returns. The PC hypothetical case study of a worker being 6%, or $51,000, worse off with just two accounts compared to a worker holding just one account, highlights this concept in its basic form.
Fund members with small balances, usually from short-term jobs, can often have their fund balances disappear altogether because of ongoing fees, especially since protections against such a scenario, called “member protection rules” were removed in July 2013.
Also, those with more than one account may have multiple insurance policies. The three main types of insurance products offered through super include death cover, or life insurance, which pays a lump sum or income stream to your beneficiaries if you die.
Total and permanent disability insurance covers you if you become seriously disabled and are unlikely to work again, while income protection insurance pays an income stream if you are temporarily unable to work.
One major problem of multiple super accounts identified by the PC report is so-called “zombie” insurance. These are insurances, like income protection, which often can only be claimed through one policy, so if you have multiple accounts you are paying premiums for insurance which will never pay out.
The PC report states: “The chief and costly culprit for such ‘zombie policies’ is income protection, which can typically be claimed against only one policy and only when members are working. A typical full-time worker can expect insurance to erode their retirement balance by 7% ($60,000) if they have income protection cover, compared to just 4 per cent ($35,000) if they only have life and disability cover.”
The PC also recommends you know what insurance you are losing if you roll one super into another.
The ATO reports that the message about consolidating your super is getting through. Over the past four financial years (1 July 2013 – 30 June 2017) around 1.68 million accounts to the value of $8.12 billion have been consolidated, transferred or claimed by fund members.
More recently, the ATO revealed that from 1 July 2017 to 31 January 2018, their records showed 189,798 people were reunited with 310,139 lost, unclaimed and active super accounts to the value of $1.8 billion.
Close to 60% of people who took action were aged 25 to 40, with more women (57,152) than men (53,233) acting to find lost and unclaimed super and either consolidating or transferring this to their preferred account.
As at 31 January 2018, the ATO held 5.38 million unclaimed super money accounts with a value of $3.83 billion. It also held 313,000 super holding accounts (SHA) worth $111 million.
Lost and unclaimed super by postcode
Simply enter your postcode below to find out how much lost and unclaimed superannuation there is in your postcode.
|wdt_ID||Postcode||Number of lost super accounts||Value of lost super accounts||Number of unclaimed super accounts||Value of unclaimed super accounts||Total number||Total value||Average value|
Source: ATO, 30 June 2018
To learn more about the basics of superannuation, see the following SuperGuide articles:
- 10 points to check on your annual super fund statement
- How to read a super fund PDS
- Super tips and strategies for all ages
- Understanding the dynamics on which your super fund invests
- How super works: A beginners guide to superannuation
- How to compare super funds in 7 easy steps
- Super for beginners: How superannuation is taxed
- What makes superannuation super? 10 hidden perks you need to know