Millions of industry super fund members will benefit from more savings under multiple accounts clean up, according to Industry Super Australia (ISA).
According to the data, the proactive work of industry super funds over the last three years helped return hundreds of millions of dollars in savings to more than 1.5 million unintended multiple super accounts thank to the industry super fund cross-fund matching programme.
Approximately 200,000 old, low balance unintended multiple super accounts were matched to members with current accounts, returning around $190 million to the super accounts of these members, Industry Super Australia said.
Multiple accounts and underperforming funds were two of the biggest problems for Australia’s superannuation system.
Earlier this year ISA unveiled a plan aimed to inform the Government’s response to the Royal Commission recommendation relating to the stapling of super funds and, with the help of KPMG, it found that elimination of multiple accounts and lifting performance across the sector would automatically rollover a person’s super account every time they changed jobs.
And the automatic rollover proposal could deliver performance dividends of up to close to $200,000 for workers and further savings through the elimination of multiple fees and premiums.
In contrast, stapling a worker to a single fund for life could see workers stuck in underperforming funds for the remainder of their working life - costing them hundreds of thousands of dollars in retirement savings, ISA said.
“We’re putting members first, cutting through red tape and moving proactively to clean up inefficiencies in our own sector, rather than leaving it to members to sort it out themselves,” ISA’s chief executive Bernie Dean said.
“This means more money in members’ nest eggs now, growing their retirement savings and reducing the amount getting eaten up by unnecessary fees and premiums.
“We agree the system needs to be more efficient – that’s why we’re leading the way in proactively consolidating members old inactive accounts, so they can get the super they are entitled to back in their hands sooner.”