Brad MacDonald is urging people to transfer Australian superannuation accounts to KiwiSaver. Photo / Supplied
Brad MacDonald is urging people to transfer Australian superannuation accounts to KiwiSaver. Photo / Supplied
People who have worked in Australia are being urged to transfer their superannuation to New Zealand's KiwiSaver or risk wrestling it from the Australian Taxation Office (ATO).
The Australian Government is increasing the threshold for employee superannuation accounts whose contributions have stopped and savers cannot be contacted, to be transferredto the ATO.
The threshold increased from A$200 to A$2000 in 2012 and was due to double to A$4000 in December and to A$6000 by the end of 2016.
Stewart Group financial adviser Brad MacDonald said it was common for people to have a number of superannuation savings accounts from different Australian employers. Repeat workers often started a new scheme with a new employer, unlike KiwiSaver, where a worker always contributed to the same account.
"We have clients who have three to five separate superannuation schemes in Australia," he said.
Savings were safe until the amount went below the ATO threshold, which made it "more challenging to recover".
The ATO will only transfer the funds to another Australian fund. If the funds were still in a superannuation scheme, however, they can more easily be transferred to KiwiSaver.
Accounts could be "whittled away" because of charges until they fell into the ATO threshold.
"Some of the superannuation schemes in Australia have insurance policies attached, so although they may be achieving good returns, a lot of that return can be sucked up by insurance premiums the member may or may not be aware of. So their balance is being eaten up slowly over time."
To locate funds, people needed their Australian tax number, last known address, name and date of birth.
"If Kiwis have worked in Australia, then chances are they have some form of Australian pension. If they are intending to live in New Zealand permanently, then they should look to bring it home.
"From an efficiency perspective, I can understand why they (the Australian Government) are doing it, but it doesn't seem fair."
