The Australian Federal Government has creatively found a way to deal with lost super – by taking it.
Under current legislation, inactive superannuation accounts in the amount of $2,000.00 or over will be transferred to the Australian Taxation Office (ATO). New legislation will increase the threshold to $4,000.00 and then to $6,000.00. Whilst endeavouring to motivate people to find their lost super, this “move” is expected to raise $815 million in additional revenue.
ATO has also changed the definition of a lost super fund account. A member’s super is lost if: a super fund has not received a contribution or rollover for a member in the past 12 months, and either the fund did not have an address for the member or two pieces of correspondence have been returned unclaimed. This is different to unclaimed super when a member meets eligibility requirements to withdraw but the super fund cannot contact them.
Once a member’s account is deemed “lost”, super fund trustees are required to transfer those funds to ATO. Superannuation fund trustees have until 31 May 2014 to transfer the account balances to ATO. Those who have changed addresses on multiple occasions and worked for various employers are at increased risk of losing their superannuation.
If you realise that you have lost track of your superannuation you can either contact the super fund trustees or utilise ATO’s online service SuperSeeker. ATO’s service will allow you to: check your super accounts, find any lost super, find any super held by the ATO which was transferred by a super fund because it was classified “lost”, and then, transfer the super into your main super account/another fund.
If your lost super is transferred to ATO, you are likely to lose any insurance cover (e.g life cover) you may have held through your fund. Endeavouring to get your super from ATO is likely to be time consuming and you will only be entitled to interest on the lost super ATO holds, from 1 July 2014 at CPI rates.
These amendments provide a greater incentive for people to locate lost super.
Update: The salary sacrifice limit will increase for all from 1 July 2014 to $30,000.00 (including the compulsory employer contributions of 9.25%).