More than one million industry super fund members have benefited from hundreds of millions of dollars in super savings, thanks to industry fund initiatives leading the way in cleaning up multiple accounts.
New figures released today show in the past three years, thanks to the proactive work of industry super funds, more than 1.5 million unintended multiple super accounts have been returned to a members’ current account, delivering hundreds of millions of dollars in savings to members.
This has occurred through a new cross-fund matching program developed by industry funds targeting low balance, inactive accounts, as well as fund led awareness and tools helping members to consolidate.
Through the industry super fund proactive cross-fund matching program, 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.
This has seen individual members save on average up to $260 a year in fees and insurance premiums according to modelling.
This industry super fund led initiative commenced in 2018 following significant work by the industry fund sector on the issue of multiple accounts, and prior to the Federal Government’s Protecting Your Super changes, which also aims to eliminate multiple accounts and deliver savings to members.
Separately, industry funds have proactively engaged with members to help them to check and consolidate their multiple accounts. The activities of top industry funds alone have seen the money in nearly 1.35 million unintended multiple accounts reunited with close to one million members over the past three years.
Multiple accounts and underperforming funds are two of the biggest and most costly drains on member savings and Australia’s superannuation system.
Industry super funds have been at the forefront of industry led action on these two issues, and believe more needs to be done on both fronts to ensure workers are being connected with a single, high quality default account with good returns and low fees.
Earlier this year Industry Super Australia unveiled a new blueprint designed to inform the Government’s response to the Royal Commission recommendation relating to the stapling of super funds.
Independent modelling by KPMG found that the best way to truly eliminate multiple accounts and lift performance across the sector was to automatically rollover a person’s super account every time they changed jobs.
This 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 dud, underperforming funds for the remainder of their working life – costing them hundreds of thousands of dollars in retirement savings.