Rice Warner head of superannuation and investment Steve Freeborn said the inflow of superannuation guarantee money to dormant accounts increases the risk of fraud.
Compulsory employer contributions often land in the default fund account of an unengaged benficiary, Mr Freeborn said.
“When the beneficiary’s circumstances change – due to a new job or going overseas – these accounts might then lie dormant for years,” he said.
“An employee of the super fund (or outsourced administrator) can easily identify those balances where there has not been recent member contact and fraudulently redeem the balance.”
The best way to detect internal fraud within a super fund is to have a system-mandated peer review step for every transaction, he said.
“A secondary detection layer lies in reports of suspicious events or changes to member records. For example, changes to a member’s address and bank details in the same period should be checked [for] supporting documentation,” Mr Freeborn said.
External fraudsters could steal cheques or member information from mailboxes, or access personal information on the internet, he said.
“Using this information, they will attempt to have the fund pay out the member’s funds, often to a fake self-managed super fund,” Mr Freeborn said.
“To control identity theft it is essential that correspondence sent by the [super] fund to members not contain key identifying information that might permit anyone holding the document to assume the member’s identity.
“Equally, this information should not be handed over to anyone who contacts [the super fund’s] contact centre,” he said.
