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Unpaid super costing workers tens of thousands of dollars

Workers on the cusp of retirement who are short changed on their superannuation entitlements have nest eggs that are tens of thousands of dollars less than those who are paid correctly.

Using the latest ATO data from 2013-14, the research from Industry Super Australia found that people aged 60 to 64 on salaries ranging from $50,000 to $75,000 who weren’t correctly paid their SG that year, had overall super balances that were $35,089 or almost 40 per cent less than those who were.

Across all ages and all salaries, those Australians who were underpaid their super had balances that were $19,709 or 47 per cent lower than those who had received it.

Australian law requires employers to contribute 9.5 per cent in superannuation towards every worker over the age of 18 earning more than $450 (gross) a month. This is the Superannuation Guarantee.

However, a report released late last year found that 2.4 million or one-third of entitled workers were denied their SG in 2013-14. For the average worker, this represented $1,489 or four months’ worth of savings.

This new work draws from an ATO 2 per cent sample file of matched personal tax and superannuation records for 2013-14 and analyses the difference in balances for people who are underpaid employer super by nine categories of age and by six categories of wage and salary. In the matrix of 54 combinations, underpaid super was associated with a markedly lower balance in all combinations.

Posted on 1 February '17 by , under Super.

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What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
  • Insurance policies
  • Investment options
  • Ongoing service fees
  • Performance of the funds

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
  • Your fund's unique superannuation identifier (USI).
  • Details of your previous fund.

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