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May 24th, 2015
The Australian Tax Office lifts the lid on where Australians are losing track of their super cash.
Academics are renowned for their intellects, but it appears that at least one is having difficulty keeping track of more than $600,000 in superannuation.
Buried in the latest superannuation data released this week by the Australian Tax Office is a remarkable disclosure that an account boasting a balance of $611,818 is now classified as “lost”.
It appears the owner of the account, whose residential address is located in the University of Western Australia precinct, may have forgotten about their six-figure nest egg.
No less remarkable is a Sydney resident who has $147,334 sitting in an account that is also considered lost by their super fund.
Koetong is a small town in northeastern Victoria with a working population of a few hundred people. According to the ATO, one of the townsfolk has an unclaimed super account worth $59,163 waiting to be retrieved.
The ATO database is peppered with many such disclosures that might cause one to review assumptions about how well Australians manage their money.
A surface reading of the national statistics suggests that our approach to managing super is both profligate and neglectful. The numbers seem damning.
All up, there are 1.29 million lost super accounts in Australia cradling combined assets worth $12.5 billion. The average balance on these accounts is almost $10,000.
There are many reasons behind the lost super phenomenon. Thousands of us just forget the money is there as we switch jobs every couple of years.
But there is also a dark side to the lost superannuation tale that helps to explain why the numbers are so large.
Some people have a material interest in making sure their super cash remains “lost” because it can keep others from getting a slice of it.
This is particularly relevant for people going through a divorce in which all the assets of working spouses are being apportioned by a court.
If the super is “lost” and the fund is unable to make contact with a soon-to-be-separated working spouse then the retirement cash is not likely to be traced before the settlement is concluded.
Another big driver of lost super has been Australia Post.
A few years ago the postal service decided to recalibrate its postcode system across Australia.
According to the ATO’s Assistant Commissioner John Shepherd, this bureaucratic process resulted in some postcodes being abolished and thousands of addresses being reclassified to new postal districts.
In the wash-up some super funds lost contact with thousands of inactive account holders.
“One of the shortfalls of the data we publish is that they are only as good as the last address we hold,” Mr Shepherd said.
“In the last few years there has been a transformation with postcodes in Australia and some of these addresses no longer exist.”
An inspection of the postcodes listed on the ATO lost super database by The New Daily indicates that many members’ addresses held by super funds are no longer valid.
The ATO is now helping super funds to renew communication with lost members.
“We’re working with funds all the time and are sharing information with them when account holders cannot be contacted,” Mr Shepherd said.
According to the ATO statistics, Queenslanders appear more likely to lose track of their super than workers in Victoria.
At the end of December last year there were 274,790 lost accounts in Queensland valued at $2.72 billion.
Despite a much larger working population, Victoria had 264,330 accounts classified as “lost”.
These accounts comprised $2.73 billion of assets.
Residents of the Queensland regional cities of Mackay, Cairns and Toowoomba also appear to be among the most prone to losing touch with their super.
These were the only cities in Australia to have total lost super balances above $50 million based on the postcode of fund members.
People living in inner-city suburbs such as Darlinghurst in Sydney and St Kilda in Melbourne are also prone to forgetting about super accounts.
Residents of posh suburbs such as Toorak in Melbourne seem more likely to keep close tabs on their super.
Only 775 accounts belonging to people with Toorak addresses were classified as lost last year, but the aggregate balance of their accounts amounted to a whopping $10.9 million.
This content was provided by the New Daily. The views expressed are not necessarily those of First Super.
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