29 May 2013
On the 5th of April 2013, the government announced that it would now take superannuation accounts with balances up to $2,500, if they were deemed “lost” from 31 May 2013.
If and when you get around to claiming these funds, they will reward you by applying an interest rate equivalent to the Consumer Price Index or basically the inflation rate (currently 2.5% pa). Now this is the bare minimum return and is basically a gift from you to the federal government coffers. In comparison they government sells bonds to the public at a rate very much higher. In comparison you can get a better rate at any bank. In comparison many Australian share based superannuation funds had returns over 20% over the last 12 months. Just a 1% per annum difference in returns over your working life can make a massive difference.
However the major issue is that when these funds are stolen, I mean claimed, by the government, any associated insurance will be lost.
This means that if you die your dependants will get nothing and if you are totally and permanently disabled you will be reliant on Centrelink.
Your superannuation might be classified as lost if a letter from your superannuation fund is returned.
Here’s what you can do to stop this theft.
1. make sure all of your superannuation accounts have your latest address.
2. when you leave a job, take your superannuation with you to the next job (tell your new employer where to pay your superannuation contributions).
2. consider amalgamating all your superannuation funds into one single fund (this could be more cost effective as you will be paying one set of account fees, if in doubt check).
3. make sure you have sufficient insurance (life, TPD and income protection) in place with your current superannuation fund (if in doubt get advice – a financial planner can help).
4. reclaim your funds as soon as possible by searching the ATO’s SuperSeeker program – it takes very little time and it’s so easy your grandma could do it!
Typically it is the younger generations that have multiple superannuation accounts and are most likely not to care (it’s a long time to retirement when you’re only in your 20’s right?).
However, taking the time now when you are young to look after your superannuation, is likely to be rewarded when you retire due to the magic of compound interest.
Take action now and don’t let the government steal your superannuation!