The Financial Services Council (FSC) says there is a need to fix superannuation defaults to adjust to a high amount of multiple job holders and the creation of ‘zombie’ superannuation accounts.
Data from the Australian Bureau of Statistics (ABS) showed 2.1 million Australians held multiple jobs in 2016-2017.
Sally Loane, FSC chief executive, said that number had increased from 1.8 million in 2011-2012.
“Data also shows 74 per cent of people with multiple jobs work across more than one industry – meaning they are more likely to have accounts in two or more different default super funds and pay duplicate fees and charges as a result,” Loane said.
“Under the current default system, most Australians do not make a choice when it comes to their super fund, and every time they change jobs, they’re defaulted into a new, separate account, while the old one gets eroded by fees and charges.”
The Federal Government’s Protecting Your Super (PYS) reforms had addressed erosion from superannuation accounts from unnecessary insurance plans, but not for the existence of excessive accounts.
“Creating additional default accounts for new employees, or requiring the rollover of their savings into a new default account, just does not work for people with multiple jobs,” Loane said.
“The Productivity Commission estimated rollovers of super accounts when members change jobs would cost $45 million every year.”