Thursday, 4 December 2008
Questions without Notice
As the last questioner of the year, I have a question to the Minister for Superannuation and Corporate Law, Senator Sherry. Is the minister aware of the ballooning problem of lost superannuation and its effect on retirement incomes for millions of Australians? Can the minister explain how this problem has eventuated and what measures have been previously introduced? And what effect did these measures have on this significant problem?
I am sorry to finish on such a sombre note of concern for Australians, but there are a staggering 6.4 million lost superannuation accounts in Australia, containing a staggering almost $13 billion. Lost superannuation comes about because a contribution has not been received for two years and the member statement is returned ‘address unknown’. This staggering figure has been increasing exponentially over the last decade. Six years ago there were 3.8 million lost accounts and $5.5 billion in lost superannuation. So there has been a staggering increase in the number of accounts and moneys lost.
It is a very serious issue and I do wish members of the Liberal opposition would listen. It is a very serious problem, and I am sure that there are many senators, as well as many people in the community, who have lost accounts. There are some important adverse consequences of having a lost superannuation account. One adverse consequence is a pretty obvious one: in the main most people never collect their money when they reach retirement. Given the staggering numbers of lost accounts, it is a very serious issue.
Of course, the other very serious issue is that, in the main, the longer you wait to claim your money—if in fact it is ever claimed—the more it is eroded by fees and charges. So your account goes backwards and it could sit in lost superannuation for 20 or 30 years and be eroded to nothing—if there is anything left to collect. It is a very serious structural issue in our superannuation system. The former government did try a range of initiatives to minimise this growth in lost superannuation. We had SuperMatch, SuperSeeker online and telephone SuperSeeker. We did not have SuperWatch, I am pleased to say. (Time expired)
Mr President, I ask a supplementary question—the last of the year! Can the minister update the Senate on any measures the government is taking to rectify this problem and how this will impact on fund members’ eventual retirement income?
As I mentioned, there is almost $13 billion in lost super and there are 6.4 million lost accounts. The Labor government have decided that we need to update our superannuation system in a number of ways and bring it into the 21st century. Of course, fees and charges are a contentious issue in superannuation—the more accounts you have, the more fees you pay. So it is very important to minimise this problem. We intend to introduce a policy of what is called auto rolling together. In this process TFNs will be used to identify and cross transfer a member’s lost account to their latest active account. In this way, we will significantly reduce the number of accounts. Individuals will be allowed to opt out if they do not want auto rolling together. This is a very positive initiative, a very practical solution to minimising the sheer number of lost superannuation accounts, which is a very serious problem in Australia. As I said, it is another example of a very positive practical policy to modernise our system. (Time expired)