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. You don’t plan it. It just happens. You move from job to job, pick up a new account here, another one there; before you know it, you’ve left a trail of super accounts in your wake. If you have multiple super accounts and are paying multiple account-keeping fees, you probably know that you could save time and money if you just choose one super fund and stick with it. But there seems to be an infidelity problem among many of us.
You might also have super accounts which you have lost track of, for example, you may not have updated your contact details with your funds when you moved house – there are still $5.8 billion worth of accounts in this category. Or, you 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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Why should you consolidate your super?
Don’t forget that super is 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. 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.
Want to manage your superannuation right way and effectively, talk to us today.
What’s it the cost of multiple super?
If you have multiple super accounts with multiple sets of account keeping fees, you could be paying more than you need to. Statistics show that the median figure for fees and other costs paid annually by Australians for a low cost superannuation account is $532 per year. Even if it’s only a small annual account keeping fee you’re paying for each super account you have-it could make a surprisingly big difference to the amount of total savings you have at retirement.
Does it change with age?
The statistics show that the prime age for two-timers is late 30s to early 40s. Though to be fair, this kind of behaviour is pretty strong from our mid 20s and doesn’t drop off substantially until retirement age.
Number of super accounts by age
|Age||1 account||2 accounts||3 or more accounts|
|18 to 25||67.62%||23.43%||8.95%|
|26 to 30||55.76%||26.71%||17.53%|
|31 to 35||52.82%||25.81%||21.36%|
|36 to 40||49.99%||25.88%||24.13%|
|41 to 45||49.12%||26.48%||24.40%|
|46 to 50||49.81%||27.52%||22.67%|
|51 to 55||52.51%||27.83%||19.67%|
|56 to 60||56.31%||27.53%||16.16%|
|61 to 65||62.54%||25.43%||12.03%|
|66 or more||79.32%||16.13%||4.55%|
Lost and inactive accounts by age 2015–16
|Age||Account numbers||Account values ($m)|
|18 or younger||28||$0.30|
|19 to 24||2,900||$23|
|25 to 30||36,431||$364|
|31 to 35||80,907||$1,064|
|36 to 40||103,168||$1,725|
|41 to 45||113,531||$2,298|
|46 to 50||93,711||$2,162|
|51 to 55||75,164||$1,849|
|56 to 60||50,603||$1,270|
|61 to 65||27,112||$680|
|66 or more||6,794||$205|
Finding your super accounts
Don’t worry if you haven’t kept track of your multiple accounts. It’s never too late, but you must locate your super accounts before you can combine them into one super account. Your super fund/s sends you a statement each year reporting your account balance and fund returns. If you’re not receiving these statements and/or don’t know which super funds that you belong to, then you have access to plenty of services to help you find your lost accounts, and increase your super benefits instantly.
You can use the ATO’s MyGov service to see details of all of your super accounts. You must register for a login, which can also give you access to other government services such as Centrelink. The MyGov service even offers a consolidation service, for your super funds, assuming they have a full record of each of your super accounts. For more information see the ATO website.
- Use SuperSeeker
Use the ATO’s SuperSeeker service which searches the Lost Members Register and other ATO records, such as ATO-held super accounts and unclaimed super money, for your lost super accounts.
- Try AUSfund
Try AUSfund which looks after the lost super of millions of Australians for some of the largest super funds in Australia. If they have your super, they will find it for free. Check this link.
- Ask your super fund for help
Ask your current super fund if they offer a service for finding your lost super.
- Ask your previous employers
Ask your previous employers for the names of the super funds that they paid super contributions to, that is, those super funds that received contributions on your behalf.
Consolidate super accounts
You can make a few thousand dollars without working too hard, by locating the details of your super accounts, and starting the process of combining your many accounts into one super fund.
Check that the super account you plan to keep charges reasonable fees. Paying an additional 1% in fees over a 30-year period can reduce your final super benefit by up to 20%. Check whether the super funds that you choose to leave also charge exit fees. You may decide to wait until exit fees no longer apply.
What type of lost super benefits can be transferred to the ATO?
Your super fund reports you as a lost member to the ATO if the super fund:
- Has not been able to contact you, and it has not received any contributions or rollover amounts for you in the past 12 months
- Has not received a contribution or rollover into your super account within the last 5 years, and you have been a member of the super fund for longer than 2 years, or
- Received your super money after being transferred from another fund as a lost member account and no new address has been found.
Click here if you want to know more about ATO rules for super.
Then, when you start in your next new job you can easily stay loyal and take your chosen super with you, by doing one simple thing: filling in a Choice of Super Fund form. To make that easier, your chosen fund should issue you with a summary of information, which includes things like the name of your fund, its ABN, your member number and account name.
Call us today if you need any help to consolidate your super.
Speak to an Expert Financial Advisor
Theo Karoumbalis is director & senior financial advisor at iadvice Melbourne (a privately owned wealth management firm in Melbourne, Victoria). He helps successful individuals manage their wealth effectively. Theo’s graduated in Commercial Law, Commerce, Accounting and Financial Planning, is a best Advisor and have significant direct markets experience.
B.Law, (LLB), B.Comm, (Accounting & Finance)