In 2012, the then Labor government enacted new legislation under the broad banner of “Stronger Super Reforms”. In general these changes have meant that money can be moved from fund to fund quickly. This can be good if done correctly and for the right reasons however we have seen instances since the introduction of the new rules where things have gone terribly wrong when someone has acted solely from an unsolicited phone call, email or direct mail without first seeking advice.
Please read below because we would like to bring to your attention a couple of changes that could potentially see our clients providing authority, unwittingly, to move their accounts.
Firstly, the Government made it easier for you to search for any lost super. Lost superannuation was defined as an account without a valid mailing address or an account that had no transactions in 5 years. The search, however, also identifies “inactive” super accounts which are any superannuation or pension account that is not receiving employer super guarantee contributions.
Secondly, the Super stream process started in late 2013 but as at 1st July 2015 is now fully in place. This enabled account transfers between APRA Regulated funds to change from paper-based to electronic fund transfer which means we do not always get a warning so that we can check with you and often prevent you from making a very costly mistake.
What to look out for
If you have a lost or inactive superannuation account (which many of you do for reasons such as holding onto more cost competitive or exclusion free insurance or gaining the government co-contribution), you may receive a phone call or mail asking for your permission to search for lost super. As described above, this process only requires your authority and tax file number.
At present some organisations are buying mailing lists and contacting you, some are even charging you to do the search that we do or you can do for free!
We suggest that you thoroughly read and understand any written requests to find your lost super. Your superannuation or pension with Summit/North will show up on these reports if your employer is not contributing Super Guarantee payments to it. Therefore, you will receive a follow up request to consolidate this lost super to the fund being recommended.
NOTE: Your superannuation and pension on the North/Summit platform are known as the “Wealth Personal Superannuation and Pension Fund”.
This is not a lost super account, it is the account that we manage for you.
Contact us first
Please do not act on any request to find your lost without consulting us first. We would much rather spend a few minutes checking this for you rather than having to fix the mess created when your money moves to another provider. The consequences can be very costly due to buy/sell fees, the triggering of Capital Gains Tax, the loss of a grandfathered pension status, resetting of your deductible amount to determine the tax free component of a pension payment. All these are potentially serious implications that cannot be reversed.
Note you have provided us with your Tax File Number (TFN) and authority and at every review we will track down any lost super for you. Alternatively you can do it yourself online using the ATO SuperSeeker service at ato.gov.au/superseeker. But please check with us before proceeding.