The Association of Superannuation Funds of Australia is calling on the Federal Government to take more responsibility in helping reunite Australians with billions of dollars in unclaimed super.
The Association of Superannuation Funds of Australia (ASFA) estimates the Australian Taxation Office (ATO) is currently holding an estimated $2.7 billion from more than 4 million unclaimed super accounts.
At the moment, it is up to individual people to chase down their lost super in some circumstances where they have moved to a different fund and forgotten to transfer the balance.
In a pre-budget submission to the Federal Government, ASFA called for the Government to change amend the Superannuation Act to enable the ATO to reunite unclaimed funds with their original owners.
“A move to place the responsibility on the ATO to reunite lost accounts with their true owners would be welcomed by consumers, many of whom struggle with the complexity of super,” ASFA’s chief executive Martin Fahy said.
“It would also benefit young people who regularly move jobs yet fail to take their super balances with them to their new fund.”
ASFA’s chief policy officer Glen McCrea said the ATO had the capacity to track down the owner of a dormant account and transfer the money into an their existing active account.
“We know the ATO can do this — they’ve got your tax file number and they’ve also got details of your other super accounts,” he said.
“This is something that is achievable and anything that can make super simpler for people is a good thing.”
He said the problem was likely to get worse because the threshold at which superannuation funds had to transfer unclaimed super to the ATO “has increased to $6,000”.
He said the change meant that the ATO was capturing an extra 100,000 unclaimed accounts a year.
“By [having your super] sitting in the tax office, you’re missing out on the benefits of returns and compounding,” Mr McCrea said.
“For a 45 year old woman who’s got $5,000 of superannuation held by the superannuation held by the ATO as a result of part-time or casual work, moving it back to her active account could boost her balance at retirement by about $10,000.
“We think it’s your super, it should be in your super account and not at the tax office.”
The ASFA said it hoped the Government would consider its submissions and implement the changes to the laws in the upcoming budget.