Super fund members face losing important life insurance cover amid a rule change that will automatically transfer more forgotten funds to the Federal Government.
If you currently have less than $4000 in a super account, haven’t been active with it for a year, and the fund does not have your current address, your money gets automatically moved to an ATO superannuation holding account.
The $4000 threshold for this transfer will rise to $6000 from December 31, causing an estimated 100,000 more super accounts to be compulsory moved.
The ATO says people can claim their money back at any time, but super industry groups say much of it remains untouched.
The ATO reported last month that there were more than 5.7 million lost and unclaimed super accounts worth $14 billion as of June 30. It said more than 40 per cent of Australians had more than one super account — with some having more than five.
Super industry group ASFA says 130,000 accounts totalling $470 million were moved to the ATO last financial year, mainly because of a threshold increase from $2000 to $4000 in December.
ASFA interim CEO Jim Minto said the previous Labor government started compulsory transferring more lost super into government revenue “and this one’s continued it”.
“ASFA has been concerned that increasing the threshold will deprive many Australians of valuable insurance benefits without their permission,” Mr Minto said.
He said an estimated 50 per cent of the new accounts to be transferred had life insurance policies attached to them “that would be dropping off”.
“For most people it’s not lost money. Sometimes people go overseas for a period and it doesn’t mean they have turned their back on their super. The government is capable of matching these people up, but that hasn’t happened so far.”
Mr Minto said the most important aim was reuniting people with their super. “Individuals should do the checking themselves, and parents can challenge their children to do the check because younger people aren’t as tuned in as they could be,” he said.