The government yesterday tabled legislation that would increase the responsibility of super fund trustees to consolidate member accounts.
Minister for Financial Services and Superannuation Bill Shorten introduced the changes, which he said would benefit Australians with multiple superannuation accounts.
The Bill expands the duties of superannuation fund trustees to implement procedures to consolidate accounts “where they hold multiple accounts for the same member and consolidation is in the member’s best interest”, according to a government statement.
As of June 2012, there were almost 32 million superannuation accounts in Australia, almost three accounts for every worker, Mr Shorten stated.
“Currently, there is no requirement for super funds to actively help members to consolidate multiple accounts within the same fund. This can lead to members paying unnecessary fees or losing track of their savings,” he said.
The new obligation will require trustees to establish procedures for consolidating multiple superannuation accounts they hold for the same member on annual basis. Defined benefit interest accounts, accounts supporting an income stream and First Home Saver Accounts will all be exempt, Mr Shorten stated.
The measure will commence on 1 July 2013 with the first round of consolidation to occur by 30 June 2014. This will apply “regardless of the balances of the accounts concerned”.
Following consultation with industry, the need to proceed with inter-fund consolidation, which consists of consolidation between funds of low balance, lost and inactive accounts into a member’s active account, will be reviewed in late 2014, according to the statement.
