New figures released by Industry Super Funds have shown that in the last three years, 1.5 million unintended multiple super accounts have been returned to members’ current accounts.
Industry Super Australia chief executive Bernie Dean believes the industry proactively cleaning up inefficiencies is a win for members.
“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,” Mr Dean said.
This has seen individual members save on average up to $260 a year in fees and insurance premiums, according to modelling.
Separately, funds have engaged with members to help them to check and consolidate their multiple accounts.
Multiple accounts and underperforming funds are two of the biggest and most costly drains on member savings and Australia’s superannuation system.
“The big challenge is to connect workers to a quality high-performing fund and tackle chronic underperformance. Otherwise, millions of Australians will end up in dud, underperforming funds that leave them worse off at retirement,” Mr Dean said.
Modelling by consulting firm 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 close to $200,000 for workers and further savings through the elimination of multiple fees and premiums.
nestegg has previously reported how retirees could be better off if they choose a fund that charges lower fees.
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