The super scam to watch out for

Beware if you’re approached with an unsolicited offer to find “lost” superannuation. 

A warning has been issued to financial planners to be wary of these types of offers as they could result in a client unknowingly rolling over active super accounts into the soliciting fund. 

Before you take action after receiving such an offer, be sure to consult your financial planner, Ben Marshan, head of policy and government relations for the Financial Planning Association told Professional Planner.

Marshan said financial planners needed to proactively educate clients that superannuation funds were undertaking these practices with little regard to whether it was an active fund or a truly lost fund. 

“There are a lot of instances where clients are approached by their superannuation fund, particularly in online banking models, (with word that) super has been found, or (a request to) look for ‘lost’ super, and then offering to consolidate it,” he said.

“There are obviously big problems with insurance, with losing access to beneficial service states, and merging (superannuation) components in unfavourable ways.”

The Australian Taxation Office (ATO) reported that as of 30 June 2016, more than 14 million Australians had a super account and approximately 43 per cent of those people had more than one. 

That percentage of people with more than one super account equated to around 5.7 million “lost” superannuation fund members with balances totalling approximately $14 billion. 

If insurance arrangements in both the fund a person is leaving and the fund into which they are rolling over to are not considered, problems can arise. 

ASIC’s MoneySmart superannuation and retirement website offers advice if you’re thinking about consolidating your superannuation accounts. 

The site also warns consumers to check their life cover before consolidating and to be “particularly careful” if you have a pre-existing medical condition and to seek financial advice if you’re not sure. 

“We would recommend people use myGov or contact the super fund they want their super to go to and get them to assist with consolidating the other super accounts,” an ASIC’s spokesperson said. 

Other tips from ASIC’s MoneySmart site on how to find your lost super include: 

• see details of all your super accounts, including any you may have lost or forgotten about.
• find ATO-held super, held on your behalf when your super fund, your employer or the government couldn’t find an account to deposit your super to.
• consolidate your super into a single fund.

It also encourages people to check their super statement regularly, even going as far as to let you know what you should be looking for. 

Have you been approached with “lost” super claims?