The Federal Government has introduced legislation seeking to prevent fee erosion of lost superannuation accounts with balances of less than $6,000.
Assistant Treasurer, Josh Frydenberg, said the Tax and Superannuation Laws Amendment (2015 Measures No 4) Bill 2015, was part of the Government’s commitment to “ensuring that Australians have adequate retirement savings”.
Speaking in the House of Representatives, Frydenberg said the amendment would increase the threshold at which funds would be transferred to the ATO as unclaimed super money, from $2,000 to $6,000, over the next 16 months.
“This Bill will make an important amendment to the superannuation law to protect lost superannuation accounts with law balances from being eroded by fees and charges,” he said.
“For super accounts with smaller balances, the cost of fees and charges and insurance premiums can exceed investment returns.
“This can be problematic for lost super accounts because in most cases, the members are not aware that they have these accounts and can end up losing money that was meant for their retirement.
“The Australian Prudential Regulation Authority estimates that the median total fee paid by Australians for a low-cost super account is around $532 per year.
“Transferring lost super accounts with low balances to the ATO will help protect these accounts from fee erosion and preserves their value until they can be reunited with the member.
“Currently, lost member super accounts with less than $2,000 must be transferred from funds to the ATO as unclaimed superannuation money.
“This Bill will increase the $2,000 threshold in two phases, first to $4,000 from 31 December 2015, and then to $6,000 from 31 December 2016.”
