Australian Taxation Office simplifies the process for consolidating superannuation accounts

THEY’RE not usually regarded as heroes, but the Australian Taxation Office has made a simple change that is saving Aussies a lot of time, and even more money.

23/05/2011 NEWS: Model in generic photo with mountain of paperwork at end of financial year at tax time for submitting taxati...

TAX time is delivering super savings as Australians slash their superannuation fees by consolidating hundreds of millions of dollars of their retirement money.

New figures from the Australian Taxation Office show taxpayers consolidated $461 million of their super accounts last month, almost 12 times more than the $39 million consolidated in July 2013 and twice as much as July 2014.

The ATO says the super rush reflects the growing number of people lodging their tax returns through the my.gov.au website, which prompts them to check their super and makes it simple to switch funds.

ATO assistant commissioner John Shepherd said super rollovers had “gone gangbusters” since the website — which also has Medicare, pension and child support services — started targeting lost super.

In previous years super fund members wanting to switch would spend hours being frustrated by complex forms and phone calls trying to move their money. Mr Shepherd said the standard switching time now was three days.

“We’ve made rollovers a whole lot easier and quicker, and taken out the paperwork. And we partnered it with tax time, so it’s in their face,” he said.

More than six million Australians have more than one super fund, and government statistics show the median figure for fees and charges paid to low-cost super funds is $532 a year.

“If you only have $2000, which a lot of people have in these smaller funds, $500 a year is not going to be there long,” Mr Shepherd said.

COMPARE PERSONAL SUPER FUNDS

The online consolidation service requires a few mouse clicks and the ATO moves your money for you, but people need to make sure they are not cancelling necessary life insurance policies if they exit a fund.

“If you do rollover, you will lose that insurance,” Mr Shepherd said.

Hillross financial adviser Lee Virgin warned that people who cancelled their insurance might not be able to get it later in life because of pre-existing medical conditions or family history health matters.

They should also make sure the fund they were consolidating into was the right one for them, not simply the one with the biggest balance, he said.

“Don’t go in blindly without thinking about it. If you are not capable, get somebody who is.”

Mr Virgin said the my.gov.au super switching system was a good idea. “It makes it a lot simpler — there was too much paperwork before. It’s no wonder people threw their hands in the air,” he said.