From the results released by the ATO, as of 30 June 2016, there were a total of over 5.7 million lost and ATO-held accounts with a total value of just over $14 billion.
Lost uncontactable and lost inactive accounts are still held by super funds, whereas unclaimed super money and superannuation holding accounts (SHA) special account is held by us.
A superannuation account is considered “lost” when the fund is unable to contact the individual and hasn’t received a contribution to an account for five years.
The collective failure of millions of Australians to consolidate their superannuation arrangements constitutes one of the biggest drains on household wealth every year.
The waste is magnified when one considers that monthly insurance premiums also continue to be deducted until idle accounts are closed. After adding deductions for death cover and income protection, the annual cost of holding multiple accounts potentially exceeds $4 billion.
Inevitably, the balances of many accounts are reduced to a paltry sum because the investment assets and annual returns are not sufficient to cover administration and insurance costs.
It’s bad enough that almost half of the working population unnecessarily doubles up on super costs every year, but the ATO’s database shows that 1.2 million people are members of three or more super funds. Some of these workers are doing material harm to their retirement nest eggs, especially on low balance accounts (less than $2000) that stand to be almost completely eroded within five years. However, there are also troves of super money out there waiting to be claimed.