Australia Tax Office to guard 'lost' superannuation funds

LOST superannuation accounts with balances of $2000 and less will be transferred to the Tax Office and held in trust until they are claimed, the Government will announce in today's mid-year Budget update. 

The measure will protect lost retirement savings from unnecessary fees charged by super funds, while also boosting returns for all super savers by reducing the cost to funds of administering these small "lost" accounts.
It will also generate extra revenue for the Government as it seeks to balance its books.
A Treasury analysis found lost super accounts with balances as low as $1000 were being slugged with average insurance charges of $169 a year, meaning they would disappear after six years.
The Tax Office already manages lost super accounts with less than $200. This threshold will increase to $2000 and, for the first time, the Government will start paying interest on the accounts at the rate of inflation.

 

"The introduction of interest means that not only will these small lost accounts no longer be eaten up by fees and charges, but they'll actually retain their value in real terms until they're reunited with the lost member,'' Mr Shorten said.
"There are 3.4 billion lost super accounts in Australia with a combined balance of $17.7 billion.''
There would also be a benefit for all super savers because, presently, the cost to super funds of having to administer these small lost accounts reduced overall returns by 0.1 per cent a year on average.
Eliminating this cost would boost the retirement balance of a 30-year-old worker on average full-time earnings by about $10,600.
Consumer group Choice chairwoman Jenni Mack said the move to protect lost super was an "extremely good step forward" on what had been an "intractable problem'' since the introduction of compulsory superannuation two decades ago.
"Fees have been exceeding earnings on these lost accounts and they have been going backwards at an increasingly fast rate. This new policy means you're going to get no fees and you're going to get interest.
"It's really good for people who lose track of their superannuation and they are typically young people, part time and casual workers and disproportionately they are women. This means that when they do aggregate their accounts there's going to be something of meaning there.''
The Government expects to earn some extra revenue from the measure which will be included as a saving in the mid-year Budget update, to be released today.
This is because once balances are transferred, the government will be able to generate a return in excess of the interest it will pay.
But Ms Mack said this was reasonable and still a big improvement for savers on losing money as they presently did.
"If the Government is managing this money that's probably a reasonable rate of return over the long term because there are costs generated in doing this. Vulnerable consumers are going to be better off."
People can search for lost super using their tax file number via the Tax Office's online SuperSeeker tool available at www.ato.gov.au.

theaustralian.com.au 22 Oct 2012

Another government sponsored fraud worth hundreds of millions of dollars in interest per annum to the government, which the corporate' media is curiously quiet about.

Documents exist outlining the details of how the interest is earned, how much and where from.

This information is kept secret from the general populous, but none the less this type of transaction is still a criminal offence.

Anyone prepared to take this matter to the corrupt courts in a class action style?