ATO to unify idle super accounts

MORE than 125,000 Victorians are about to get a $120 million boost to their retirement savings.

The windfall emerges from the Australian Taxation Office’s first matching of owners’ forgotten super accounts against their active ones.

New powers have allowed the ATO to identify 485,000 unclaimed accounts nationally containing a combined $473 million which in October will be returned to their owners’ active super account, or bank account if the amount is less than $200.

“Previously only you could reunite ATO-held super by using ATO online services or a paper form,” said ATO assistant commissioner for super, Graham Whyte. “Now the ATO can do it on your behalf.”

The sum being reunified equates to about 12 per cent of the $4 billion held by the ATO in 5.4 million accounts. It expects to be able to match more of what’s left.

The added bonus for the owners of the nearly half a million accounts is that they will no longer be paying for duplicate insurance they couldn’t even claim on as doubledipping is usually not allowed.

Death cover for a 40-yearold could strip $150 a year from a duplicate account, as could income protection insurance.

Super Consumers Australia, a division of Choice, said the reforms would protect people from a “double whammy” of fees and insurance premiums.

“Big insurers and super funds have been silent parasites for years, quietly nibbling away at the retirements balances of half a million accounts long since forgotten,” said SCA senior policy adviser Cameron Sinclair.

The new powers cap fees on small accounts, makes insurance optional on new accounts for under-25s and requires funds to transfer accounts with a balance below $6000 to the ATO after 13 months of inactivity.