As at May 2021, the Association of Superannuation Funds of Australia (AFSA) stated there were 24.4 million individual superannuation accounts held by Australians.

Every time we change jobs, and our new employer asks for our superannuation fund details so they can make compulsory contributions. If we don’t have those details at hand, our new employer will make contributions to their “default” fund, thereby resulting in a new account being opened.

As a result, many Australians have ended up with multiple, often small superannuation accounts. Sadly, these account balances are eroded over time to a point where, after fees, charges, and insurance premiums are deducted, nothing is left and the account is closed.

There will be occasions where having more than one superannuation account will be intentional. Where an individual wishes to:

• hold stand-alone insurance through super,
• segregate their taxable and tax-free components for estate planning purposes,
• draw a pension while also continuing to contribute, or
• hold money in the superannuation system even though they have reached their transfer balance cap, maintaining multiple superannuation accounts will be appropriate.

One of the inherent risks of having multiple superannuation accounts is the risk the accounts will become “lost”.

Just imagine, you have multiple superannuation accounts with different super funds opened because you have changed jobs a few times. You then move house and forget to advise your various superannuation funds of your new address. As a result, your super funds lose contact with you.

When a super fund has a lost member, they are required to transfer the lost account to the Australian Taxation Office (ATO). The ATO will then attempt to reunite the lost member with their lost superannuation.

The government-run campaign of reuniting members with their lost super has been quite successful, with around 13 million duplicate accounts having been closed or consolidated, over the course of the past few years.

However, there are still many duplicate accounts in existence. Having multiple accounts can result in duplication of fees and charges.

Looking for lost super and consolidating multiple accounts can be done quite simply by checking the superannuation tab in your MyGov account.

Before consolidating super it is important to speak with your financial adviser to ensure consolidation is in your best interest. Importantly, consolidating super may result in the loss of valuable insurance cover.

 

 

Source: Peter Kelly | Centrepoint Alliance