Australians have until the end of October to consolidate their superannuation or risk losing potential future earnings, a superannuation group is warning.
As of October 31, all inactive, low-balance superannuation accounts with less than $6,000 will be rolled over to the Australian Tax Office (ATO), with the ATO then attempting to reconnect these savings with Australians’ other accounts.
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But if the ATO is unable to match the old accounts to the new, the ATO will hold onto the accounts where they will earn interest benchmarked with the Consumer Price Index (CPI), which is 1.6 percent. That’s 4.5 per cent lower than the industry super funds’ average returns.
“With less than a month to go before these super changes kick in, it’s really important that Australians do their housekeeping and check on their accounts before it’s too late,” Industry Super Australia chief executive Bernie Dean said.
The government’s plan is designed to stop savers with multiple accounts being charged unnecessary fees and insurance charges.
These moves are expected to save Australians $2.6 billion in fees.
“These are good changes that will put more money back into the super nest eggs of thousands of workers – but it’s important Australians are aware they could miss out on extra earnings, if their old and forgotten accounts end up sitting with the ATO.”
He said it’s also good to remember that an inactive account is one that hasn’t received a contribution over the last 16 months - including new parents or those studying or working overseas.
How do I protect my super?
Dean said sorting this out is “easy”.
“If you have multiple accounts you can consolidate now and protect and maximise your savings, or if you’re a person who has been out of the workforce for a while you can make a contribution to keep your fund ticking over.
“If you’re not sure if you’re going to be affected by the changes, just give your super fund a call and they’ll be able to help you.”
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