It is easy to lose track of the amount of superannuation funds you've as you go along from job to job. It's believed that close to 40% of Australians convey more than a single super account. Also, it seems some people might have overlooked a super account - or even two.
At the end of 2014, there is a lot more than $14 billion gathering dust in lost super accounts. Vast amounts of dollars are in limbo due to the fact the account holders forgot to update personal information like a change of address or even a new phone number, or because the accounts hadn't received a contribution in 5 years or more.
Why you need to combine your super
Having several superannuation accounts isn't a good suggestion, if you don't like to have a faceless fund manager fritter away your cash. The key reason is the fact that superannuation fund management charges in Australia are some of the highest on the planet - so the balance of every of the super accounts is going to be silenced, and maybe drastically, reduced through the years.
Fees can definitely have a toll over time. Roughly speaking, having to pay just 1% more every year can help to eliminate the value of your own super account by 20% over 3 decades.
A whole lot worse, small balances through short-term jobs can vanish altogether as a result of ongoing fees, because the protections against this type of scenario (or 'member safety rules') were eliminated in July 2013.
This is a particular problem for young adults with small accounts that do not see any efforts between jobs. Before they are fully aware it, their budding retirement funds can vanish in a haze of management costs.
Before the change, balances of $1000 or fewer were shielded from such depredations coupled with been since 1995.
It can make far better financial sense, then, to pay for some fees on one account, and also to keep those fees to a minimum.
Just when was my super considered lost?
Your super fund will report you to define the ATO like a lost member if:
They've tried, although not had the ability to contact you
They've not obtained any contributions or even rollover amounts for you personally within the last 5 years
Your account was moved from an additional fund like a lost member account with no new address has been discovered.
Super funds possess to report and pay certain kinds of unclaimed super towards the ATO twice a year, in which the billions will languish till someone produces a genuine claim.
The ATO might have your cash if:
Your lost account offers $4000 or less
Your lost account continues to be inactive for Twelve months and also the super fund can't find out the owner.
Otherwise your hard earned money continues to be using the super fund.
Just how can you have it fixed? The ATO's SuperSeeker tool enables you to search for lost super utilizing your name, birth date and tax file number.
(On the related note, money relaxing in bank accounts is known as unclaimed if there has been no account task for 7 years. Up to 31 December 2015, the time limit would be a significantly tighter 3 years. Unclaimed money would go to the Commonwealth of Australia Consolidated Revenue Fund, from which it may be extracted by the rightful owner anytime.)
How do you merge my super?
Knowing where your numerous super accounts are, it isn't an issue to consolidate them - if you will need to do a research session and think several things through.
The initial step is deciding that super fund you need to be your one-and-only fund.
The very best points to consider are:
Which fund provides the kind of insurance - usually death as well as disability insurance and also income protection cover - that you'll require? Don't bail out of a fund that provides insurance you need and can be unable to get elsewhere.
Does the fund (or even funds) you need to bid farewell to impose exit fees? If that's the case, they likely be offset through consolidating right into a single super account along with one set of fees, but it is good to understand what to expect.
Which fund is the better performer? This really is tricky, however the general rule of thumb would be to search for the very best performance on the five-year time frame, and be aware that most account balances are going to be impacted by major sharemarket upheavals and so on. Two impartial and well-established superannuation rating companies in Australia are Chant West as well as SuperRatings. Their rating methodologies vary - super is simply too complicated a product for any one-size-fits-all approach. However, you can get a good sense of the way your super fund continues to be performed, in most cases, by exploring the rankings and also the methodology in it. It's pretty straightforward stuff when you spend time around the rating websites.
Which fund has the lowest fees? Once we reported within an earlier story, annual fees are often as low as $300 or up to $1245 on a $50,000 fund. High fees don't suggest high end, though there may also be an association. And, of course, high performance could be offset by high fees. Request your designated super fund regarding its fee structure. The rating services offers details about fees, and ASIC offers a calculator which will show the resulting fees will have within the long run.
Finally, is the chosen fund one which your present employer will pay into? If so, make sure to tell your employer if you've chosen a new fund.
The way to consolidate
Discover your fund membership numbers, which is on any statement or even communication you've from the respective funds. If you cannot find it, but be aware of the name of the fund, contact them and explain your circumstances. Getting your tax file number on hand can help prove your identity.
Contact your selected fund or visit their website and finish their superannuation rollover form and they're going to take over from there. Some funds may also help you locate lost accounts, and you may also find rollover forms around the ATO's website.
You may also consolidate your super by opening a MyGov account, linking it towards the ATO, and utilizing its 'manage my super' tool - particularly handy if you cannot find account statements to recognize your super funds.
Source - findyoursuper.wordpress.com
