CHRIS ZAPPONE July 04, 2012
Workers flocking to the mining regions are the ones most likely to miss out on a part of their retirement savings through unclaimed superannuation holdings, a new report shows.
The Pilbara in Western Australia; Darwin in the Northern Territory and the North-West region in Queensland are the areas with the highest proportion of unclaimed superannuation, according to the Westpac Lost Super Report.
The high turnover of fly-in fly-out mining workers and employees hired on a shorter term basis has likely contributed to the Pilbara having an estimated lost super per person of $3332, the report showed. By region, inner Brisbane ranked No. 4 on the list, followed by inner Sydney and South Eastern WA.
“You’ve got very high proportions of losses in remote areas when you have people entering those regions for specific work,” said Westpac group head of superannuation Melanie Evans. “You also have people entering regions such as the Pilbara having many jobs over their lifetimes. And they’re likely to be very mobile within those regions."
In total there are $17.4 billion in unclaimed superannuation holdings in 2011, down from $20.2 billion in 2010, according to data from the Minister for Financial Services and Superannuation.
Closely following the remote regions, inner city areas are rife with lost super holdings. The “key driver” in those areas were under 40-year-old workers, who have had four or more jobs in their first decade of work, said Ms Evans.
“From our research it is particularly worrying to see the lack of motivation from younger Australians to take ownership of their super given its money they have earned.”
The Westpac research showed that 61.8 per cent of employees under the age of 40 were likely to have lost super, compared to 41.4 per cent of those between 40 and 59. Those who were 60 and above had only 21.1 per cent were likely to be missing funds owed to them.
By state New South Wales had $5.36 billion in unclaimed super, ahead of Victoria with $4.47 billion, according to Westpac. Queensland had $3.18 billion in lost super, compared with WA which had 2.04 billion.
"The best way for people to avoid losing super is to ensure that their super fund has their tax file number,” said Minister for Financial Services and Superannuation Bill Shorten.
The government offer a tool for people to track down abandoned super holdings, at www.ato.gov.au/superseeker.
In a move to futher increase the retirement nest eggs of Australians, the superannuation guarantee is rising to 12 per cent from its current 9 per cent, progressively over six years beginning in July 2013.
The passive nature of the superannuation system in which funds are set aside by companies for employees as soon as they start a job often sees employees failing to switch over the holdings when they switch employers.
While superannuation funds remain a primary source of retirement savings for Australians, recent market wobbles have undercut the wealth of savers in the past year.
Super fund tracking group Chant West forecasts that the median growth super fund, with an allocation of between 61 and 80 per cent in growth assets, will have grown by 1 per cent in the year to June, amid volatile sharemarkets and sinking commodities prices.
The June 2012 result followed a rise of 9.2 per cent in the year to June 2011 and 10.4 per cent in the year to June 2010.