Unlocking super value for your employees

What you could do to help if your employees have multiple super accounts, lost, or unclaimed super.

Millions of accounts, billions of dollars
 

Multiple accounts
 

Nearly 4 million people in Australia have multiple super accounts^. While this may be an intentional decision for some people, for others, it may be they’ve lost track or not managed to consolidate1 theirs just yet.

If, over the years, your employees have changed jobs, or have worked in several part-time or casual roles, chances are they’ll have more than one super account.

While there’s no rule against having multiple super accounts, it can potentially mean multiple sets of fees and insurance premiums, multiple logins, and extra paperwork.
 

Lost or unclaimed super
 

If any of your employees have one or more super accounts that they may have neglected, there’s a chance these accounts could become ‘lost’ or eventually ‘unclaimed’.

There’s around $17.8 billion in ‘lost’ or ‘unclaimed’ super^^ – and given some of your employees could be entitled to a portion of this, and could perhaps do with some guidance on how to rationalise their super accounts, we’ve highlighted some ways you could help them.
 

In this article we explore:

Help your employees to reduce multiple super accounts, lost, and unclaimed super
 

By integrating the following practices, you can help minimise the risk of your employees having multiple super funds, losing track of their super, or having unclaimed super, meaning their retirement savings can be more effectively managed.

Streamline the process for superannuation choice


Simplify super choice forms. It’s straightforward for an employee to nominate their preferred super fund by providing the super fund choice form within 28 days of their employment start date. You can explain how it works and the importance of completing the form, but you can’t tell them which option to choose. If they don’t complete the form, you should request details of their ‘stapled’ fund from the ATO.


Make sure your default super fund is working for you and your employees
 

Tools and resources. Be sure your super fund offers tools and resources that can help your employees manage and consolidate their super1. Mercer Super’s consolidation page is a good place to start.

Employee benefits. You chose your default super fund for a reason. It’s important to clearly communicate the benefits of the chosen fund to your employees, and provide them with information for them to consider using it as their primary super account.

If you’d like to receive an overview on the ‘Benefits of Membership’ with Mercer Super, please contact your Client Executive if you have one, or you can call us on 1800 682 525 (option 4) Monday to Friday, 8am-7pm (AEST/AEDT).

Conduct regular audits and make timely contributions

Tight record keeping. Periodically audit your employee records to ensure their super details are current.

Timely super contributions. Ensure your employer contributions are made promptly to avoid any delays that may lead to confusion or multiple accounts.

Pay using a SuperStream service. Using a SuperStream service like Mercer Employer Portal or Mercer QuickSuper to pay your employees' super contributions can streamline the process and reduce the likelihood of errors.
 

Educate your employees about super
 

Onboarding sessions. When you’re taking on someone new, it’s worth providing a comprehensive overview of superannuation during the onboarding process, especially if they’re new to the workforce.

Tax file number (TFN) declaration. Encourage your employees to provide their TFN when filling in their super fund choice form. This can help facilitate any future consolidations.

Regular updates to employees. Providing periodic updates and information sessions about super, including how to keep track, how to find, and how to consolidate super1 can be useful for your employees.

On-site assistance or workshops. Offering help for employees to understand and complete the consolidation process can help them get on top of their super.

Reach out to your Mercer Super Client Executive if you’d like a session for your employees. Or call our Helpline on 1800 682 525 (option 4) Monday to Friday, 8am-7pm (AEST/AEDT).
 

Exit process and superannuation
 

Exit interviews. During any exit interviews, remind your departing employees to check their super details are accurate for their super fund, e.g. personal (not work) email address, home address, phone number.

Make sure their personal email is on file. If you’ve not already updated their details with their personal email address, now is the time to do it. This will ensure any correspondence from their super fund will make it to them.

Ensure final contributions are made. Be sure you make your final super contribution to any departing employee and let them know you’ve done so.
 

The role of consolidation


Super fund consolidation refers to the process of combining multiple super accounts into a single account. It is relevant as, despite ‘Stapling’, employees often accumulate multiple super accounts from different jobs over the course of their working lives.

Understanding the benefits of consolidation can help you facilitate better financial outcomes for your employees.

Simplified management. Managing one super account can be significantly easier than juggling multiple accounts. Employees may be able to keep track of their contributions, fees, and investment performance more efficiently.

Reduced fees. Each super account typically incurs fees2. Consolidating accounts1 can potentially reduce these fees, resulting in saving money over time.

Avoiding lost or unclaimed super. Super fund consolidation can help your employees avoid losing track of their super or seeing their super becoming lost or unclaimed.

Potential for growth. Lost or unclaimed super may mean overall retirement savings could be eroded, as the funds are not being exposed to the investment opportunities that super can offer.
 

Considerations when consolidating super1
 

Investment performance. The investment performance of super funds can vary3. It’s important employees compare the investment objectives of their super funds and choose one that aligns with their retirement goals.

Insurance. Employees may have insurance cover attached to their super accounts4, meaning consolidating accounts1 could result in the loss of insurance cover, so it’s important they check and, if necessary, arrange alternative cover. Some super funds, including Mercer Super, may allow existing insurance cover to be transferred5, so it’s worth exploring this before consolidation1.

Fees. Not all super funds charge the same fees so it’s important employees compare fee structures of super accounts and consider the impact of fees on their retirement savings before consolidating.

Beneficiaries. When consolidating super accounts1 it’s important employees consider any nominated beneficiaries they may have. Consolidating super may not automatically carry over beneficiary nominations, which could impact how their super is distributed upon their death.

Fund benefits. Some super funds offer additional benefits, such as financial advice, educational resources, and member services. These benefits could be useful considerations when choosing a fund to consolidate1 into.
 

Frequently asked questions

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  • How can my employees find their lost super?

    Employees can log into Member Online when they visit Mercer Super and from the main menu, select “Find My Super”. Alternatively they can use the ATO’s online services through myGov to search for lost super, and also contact their previous employers or super funds, and also contact their previous employers or super funds.

  • Is there a fee for consolidating super accounts?

    Super funds are not allowed to charge an exit fee for leaving their fund. However, some funds may charge  a buy-sell spread fee when members ‘cash out’ or exit an investment. Employees are encouraged to check with their super funds to understand any potential costs.

  • What happens to insurance cover when consolidating super?

    Consolidation may affect existing insurance cover. Employees are encouraged to check the terms of their insurance policies and consider transferring or obtaining new cover if needed. As always we suggest your employees seek professional advice from a licensed, or appropriately authorised financial adviser if they are unsure of what action to take. 

  • Can employees consolidate super accounts at any time?

    Yes, employees can consolidate their super1 accounts at any time.

  • How long does the consolidation process take?

    The process is usually straight-forward however could take up to a few weeks, depending on the funds involved, beneficiaries nominated, and any insurance arrangements. Employees are encouraged to monitor their accounts to ensure any transfer is completed successfully. 

  • What if an employee has super accounts with different types?

    Employees are encouraged to evaluate the benefits of each account and decide which ones are most important to retain. They may consider balancing the benefits against the cost savings of consolidation.

  • Why should my employees review their beneficiaries?

    When your employees consolidate1 their super accounts, any nominated beneficiaries may not automatically transfer across to the consolidated1 account. It's important employees review and update their beneficiary nominations to ensure their super is distributed according to their wishes upon their death. Failing to do so may result in the trustee of their super fund working out who should receive their death benefit, which may not align with their intentions.

Need more help? We’ve got you covered
 

If you need help in managing your employer super obligations be sure to contact your Client Executive if you have one.

Or else you can call us on 1800 682 525 (option 4) Monday to Friday, 8am-7pm (AEST/AEDT).

 

Key takeaways:
 

  • Super fund consolidation could help your employees simplify their super management, potentially reduce fees, and help enhance growth of their future retirement savings.

  • While there’s no rule saying your employees can’t have multiple accounts, it’s important they understand the potential implications with regards to multiple fees, insurance, and beneficiaries. 

  • Providing employees with education about consolidation can help support their financial wellbeing and retirement readiness.

  • When your employees understand the intricacies of lost and unclaimed super, as well as the factors to consider when finding and consolidating super, such as insurance, they are likely be in a better position to be on track to meet their retirement goals.

  • No two situations are ever the same, so it’s worth your employees seek financial advice for help on their personal circumstances.

Did you know?

When a super account has been inactive for a period (typically 12 months) and there’s been no successful contact with the member from the fund, it’s classified as lost super.
 

After a certain time, lost super is transferred from the super fund to the Australian Taxation Office (ATO), and until it is claimed by the member, it classified as unclaimed super.

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Features of a default fund

Assess the features and benefits available for you and your employees

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This material has been prepared by Mercer Superannuation (Australia) Limited (MSAL) ABN 79 004 717 533, Australian Financial Services Licence (AFSL) #235906 (RSE#L0000819). MSAL is the trustee of the Mercer Super Trust ABN 19 905 422 981. MSAL is a wholly owned subsidiary of Mercer Australia Pty Limited (Mercer). 'Mercer' is a registered trademark of Mercer Australia Pty Ltd ABN 32 005 315 917.

Any advice contained in this material is of a general nature only, and does not take into account the objectives, financial situation or personal needs of any particular individual.

Prior to acting on any information contained in this material, you need to consider the appropriateness of the advice taking into account your own objectives, financial situation and needs, consider the Product Disclosure Statement (PDS), Product Guide, Insurance Booklet(s), and Financial Services Guide for any product you are considering, and seek professional advice from a licensed, or appropriately authorised financial adviser if you are unsure of what action to take. The product Target Market Determination can be found at mercersuper.com.au/TMD.

The information in this material is based on information received in good faith from sources within the market and on our understanding of legislation and government press releases at the date of publication which we believe to be reliable and accurate. Neither Mercer nor any of its related parties accepts any responsibility for any inaccuracy.

^ Trend towards single accounts

^^ Total lost (fund-held) and ATO-held super

1 Combining your super can be a significant financial decision. If you decide to combine all or part of your other super account(s), carefully consider how this may have an impact on your existing insurance, contribution and tax arrangements, fees or charges, or any other benefits you may lose. If you intend to claim a tax deduction on your personal contributions, you will need to provide your existing fund with a notice of intent to claim before combining your super. We recommend you seek financial advice before deciding whether to combine your super accounts.

2 Fees and costs can vary from year to year. Past fees and costs are not a reliable indicator of future fees and costs. Fees and comparisons may differ for different investment options and account balances.

3 Past performance is not a reliable indicator of future performance.

4 With Mercer Super, Automatic Insurance Cover is provided to members subject to meeting eligibility criteria. The type and amount of cover provided, cost of cover, and cover expiry ages may vary depending on the Plan. Insurance arrangements, including if the employer pays for any or all insurance premiums for members, may be impacted should employees change employment. For full details refer to the relevant ‘Insurance Booklet(s)’, ‘How Your Super Works’, and ‘Product Disclosure Statement’ documents found at mercersuper.com.au/pds.

5 Some funds may allow for the transfer of insurance cover held with other super fund(s) or other insurance company(ies), subject to limits, conditions, and approvals. Refer to the Product Disclosure Statement and contact the relevant super fund for more information.

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