Did you know that a new law beginning on July 1, 2013 was created with the purpose of reducing the number of those super accounts deemed unnecessary? The law states that when an individual has multiple super accounts for one fund, that those accounts must be consolidated where it is in that individual’s best interest. Reducing the number of unnecessary super accounts means that members pay fewer fees and insurance premiums, as well as reduce the number of lost super accounts.
Who May Have Multiple Accounts?
Often, more than one super account is the case when an individual ends up working at different employers within a single industry, and does not have control over the choice of their fund. What often occurs is that when an employer sends the superannuation guarantee or SG contributions to your fund, a new account is created if the contribution comes from a new employer.
Your Trustee May Have Control
What many seniors don’t know is that the individual named as Trustee of their fund has legal authority to merge any multiple accounts without needing the permission of the fund member. However, they can obtain permission if they wish.
More Onus Placed On Trustees
The 1993 Superannuation (Industry) Supervision Act was recently expanded upon to further detail the duties of Trustees. It requires all Trustees to create a set of rules for the way in which they will locate any multiple accounts. As well, the Act requires Trustees to conduct a multiple-account search at least once per annum, as well as merge any multiple accounts where they deem it to be in the best interest of the member. Finally, the new process doesn’t allow Trustees to charge any fees beyond those associated with buy or sell spreads.
How Trustees Must Make Decisions
When considering whether or not merging accounts is in the member’s best interests, Trustees must think about all possible savings, including those from premiums, charges, and fees once those multiple accounts have been consolidated. However, the merging of accounts is not mandatory. If a Trustee does not think that consolidation is practical, they do not have to make the choice to merge.
There are many aspects to retirement planning to consider. When seeking superannuation advice, the best place to go is to a professional. Knowledge is power, and understanding your rights should be at the top of the list. Discover how to maintain control over all areas of your retirement by calling us today to speak with one of our experts.
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