If you’re like millions of Australians, you may not even realise it.
As new laws are enacted to ban exit fees, cap other fees and consolidate inactive and low balance superannuation accounts through the ATO, it’s an ideal time to check that your own inaction is not eating into your life savings.
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Technology has turned this into a simple process through the my.gov.au website.
Fresh figures from the ATO show that 66,000 people consolidated more than 105,000 accounts worth $860 million in the last three months of 2018.
ATO assistant commissioner Graham Whyte said consolidating multiple accounts minimised fees and delivered better retirements, and the latest figures were encouraging.
“But there is still over $17.5 billion in lost and unclaimed super,” he said.
Consolidating online can take just a few minutes.
“If you’re not sure whether to consolidate, check with your super fund who can advise you on issues such as insurance that may be attached to your accounts”, Mr Whyte said.
Goldsborough Financial Services director and adviser Brenton Miegel said the ATO’s super consolidation system was great, but people should first check if consolidating would result in them losing insurance cover they might not be able to get back.
TOP PERFORMING SUPER FUNDS
“Don’t just blindly move all the super into a single fund before you make sure it’s the appropriate fund for your situation,” he said.
Mr Miegel said Australians tended to be lazy and complacent about financial matters that were not considered urgent. “Complacency is why we end up with billions of dollars of lost super,” he said.
A key rule change is the automatic consolidation of inactive counts under $6000 from July 1 this year. This means that people with several small, old super accounts will have them transferred by the ATO into one of their larger, active accounts.
Seniors advocacy group COTA Australia’s CEO, Ian Yates, said the move should increase the super balances of three million people by an average $2000.
“The growth in multiple low balance superannuation accounts which are then eroded in value by insurance premiums and administration fees has been a scandalous blight on the superannuation system,” he said.
The legislation also bans exit fees and high fees on some accounts. This is expected to help more than seven million super savers in the first year.
“The ban on exit fees is an important step forward in improving the portability between products and funds across the superannuation system,” Mr Yates said.
FIVE STEPS TO SORTING YOUR SUPER
1. Log into my.gov.au or create a myGov account.
2. Link your account to the ATO.
3. Select “super”.
4. You can then find and transfer super.
5. If uncertain about insurance, check with your fund.
Source: Australian Taxation Office