Lost super still growing

The best efforts of consecutive Federal Governments to address Australia’s lost super problem appear to have fallen short, with new data revealing lost account balances are continuing to rise.

The new data, released by Sydney-based ratings house, SuperRatings, has revealed the number of small and lost accounts flowing to Eligible Rollover Funds (ERFs) grew by an additional 106,000 last financial year.

According to SuperRatings, this brought the total number of accounts, as at 30 June 2010, to 6.1 million – representing around $5.4 billion in unclaimed superannuation.

What is more, SuperRatings claims that the fees being deducted by ERFs from the inactive accounts remain close to double those deducted by mainstream superannuation funds.

“This has allowed suppliers to strip an estimated $130 million from these accounts in the past financial year alone, due in part to Australians’ apathy and in part to a system that makes consolidating superannuation far too complicated, despite the best efforts of some of the better ERFs in the industry,” the SuperRatings analysis said.

The analysis also pointed out that under new regulations that came into effect in October, 2010, the Federal Government would reap some benefits from lost and unclaimed super accounts with those with $200 or less being passed on to the Australian Taxation Office to eventually find their way to consolidated revenue.

It said it expected the proposed SuperStream arrangements and tax file number matching to improve the situation.