If you’ve switched jobs many times, or you’ve been slack in keeping track of where your contributions are going, your super could be among the almost $16 billion in funds that have been declared officially “lost” by the Australian Tax Office (ATO).
According to the ATO, the average amount of lost super is around $8,300.
Greg Leaney, client services manager at Catholic Super, says that many people have much more languishing in a forgotten fund.
“The largest one I’ve ever found was last year, and it was $22,000, so by no means a small amount,” he said.
“The person didn’t even know anything about it.
“If I meet 10 people in a day, whether they’re members of Catholic Super or not, on average I’d say roughly three have lost super.”
New South Wales has the largest amount of lost superannuation in Australia at over $5 billion, according to the ATO. Victoria comes in second with over $3.5 billion.
Queenslanders ($3.05 billion), Western Australians ($1.7 billion) and South Australians ($969 million) seem to be much better at keeping track of their super, although that may be because of smaller populations.
Even if the ATO hasn’t declared your funds as “lost”, you might still have little bits of super scattered here, there and everywhere, costing you dearly.
Alison Gallagher, author of the Regret Nothing Super Campaign, a financial literacy program aimed at young people, warns that knowing the location of your super is crucial to ensure it is being invested correctly.
“If you have numerous accounts you are paying numerous sets of fees and possibly numerous life insurance policies too,” she said.
Why are we so good at misplacing our super?
Shane Bonke, a financial advisor at Lighthouse Consultants, says that many people just don’t seem to care about their super.
“As they often can’t access it for a long time, they see it as something to deal with closer to retirement,” he said.
“But by spending a small amount of time sorting it out now they can save themselves thousands of dollars throughout their lifetime.”
According to Jessica Darnbrough, a spokesperson for the financial planning department of Mortgage Choice, young people tend to be the worst offenders, because they change jobs more regularly.
‘Lost’ or just scattered?
Since May last year, any small amounts of lost super (up to $2,000) will be automatically handed over to the ATO if your fund can’t get in touch with you.
Once transferred to the ATO, these funds are known as “unclaimed superannuation”, and will only increase in accordance with the Consumer Price Index (CPI).
But if your fund has received some contribution in the last year or so, it won’t be officially declared “lost”, according to Catholic Super’s Mr Leaney.
“It’s still sitting there, but people possibly won’t know it’s there,” he said.
Eventually your funds will be declared lost, but it could be quite a few years before that happens.
1. Find your lost super on the SuperSeeker website
Simon Wilson, director of SAR Wilson & Co, advises that finding your lost super is relatively easy.
“The ATO’s SuperSeeker is a dedicated site for finding your superannuation,” he said.
Once you’re in the system, you can view all your super accounts. You can then consider whether to consolidate that lost super into your preferred super account, using our simple online form. You’ll need your, tax file number, last income tax assessment notice, and your bank account details, so make sure you have these to hand.
“There are other websites offering to find your super, but they may change a fee, so [it’s] best to head to the ATO’s Super Seeker,” Mr Wilson warned.
2. Stick with a single fund
Regardless of whether you have hundreds or millions in your super fund, you’ll be hemorrhaging money if your super is spread across several funds.
“It’s best to get it all into one low-cost, high performing fund, which can mean thousands or tens of thousands of difference at retirement,” Greg Leaney advised.
3. Consolidate multiple funds into one
If you’ve already got more than one fund, it’s time to think about rolling all your super into a single fund.
According to the experts, consolidation is the key to solving your super headaches, regardless of whether you’re starting out in your first job or well-established in your career.
The SuperSeeker website should be your first stop for this as well.
“You can also use SuperSeeker to consolidate your accounts, no matter how many. The system will step you through how to transfer funds from one super account to another. You can do them all at once. You shouldn’t need to do any paperwork and fund-to-fund transfers will generally take three working days to be processed,” said an ATO spokesperson.
Adam Mckenzie, a financial advisor at BLS Financial, recommends that before consolidating, you should get expert advice, as there may be hidden costs involved.
“People may not be aware of outgoing funds exit costs, and insurance held inside the super fund may be voided,” he said.
4. Rollover your fund when you switch employer
Jessica Darnbrough, a spokesperson at Mortgage Choice, says that the number one reason for lost super is people changing jobs.
“When people change jobs, they tend to open another super account,” she said.
“Each time they change jobs, people should make sure that they stay in the same super account, or move the old super account in to the new one.”
5. Don’t double up on insurance
If you must have multiple funds, make sure you aren’t paying for several types of the same insurance.
“Most super funds are aligned with an insurance premium – a form of insurance or a certain cover. To pay for that, premiums are deducted from your super,” Ms Darnbrough explained.
These insurance premiums will slowly erode your super, with no added benefits.
6. Always notify super funds of your new address
“It gets a bit tricky” when you relocate because super funds can lose track of your whereabouts, Greg Leaney said.
So whenever you move, find out who you’re with and let them know your new address.