The peak body for non-profit super fund has found that many Australians are letting their retirement nest eggs dwindle because they are paying unnecessary fees on $13 billion of "lost" superannuation accounts.
The Australian Institute of Superannuation Trustees (AIST) has found that there were around 6.4 million "lost" superannuation accounts worth $13 billion in June 2008.
Fiona Reynolds AIST's chief executive suggested that SUPER fund holders should merge their accounts so that they only needed to pay just one set of fees. People who have more than one SUPER fund are paying fees on all of those accounts. That is a good enough reason to consolidate all the funds together.
The AIST also found that the number of lost SUPER accounts rose by 8.4 per cent in 2008 from the year before. Many employees, especially younger workers, forget to transfer their SUPER funds when they change their jobs.
Ms. Reynolds also stated that more work was required to make rolling over superannuation accounts more streamlined as Australians should have an easier way to consolidate their SUPER accounts. Some SUPER funds are quite difficult to consolidate so people often tend to give up on the process.
Ratings agency Super Ratings found that the global economic turmoil on the financial markets helped cut the value of the average balanced superannuation fund by nearly 20 per cent in 2008.
For people close to retirement or retirees the drop had really affected them. Younger people will recover from this financial crisis as they have plenty of time.
It is possible to retrieve lost SUPER accounts through the Australian Tax Office.
Nick Sherry Superannuation Minister has asked superannuation funds to lower their management fees from an average of 1.25 per cent to under 1 per cent. He further went on to state that in these difficult times, many fund members would question the fees they had to pay as lower fees translate to higher long-term returns.
It was also suggested that SUPER fees were too high in some sectors, especially in the retail sectors.