Stapling to close 500,000 unwanted super accounts

There has been reduction of 13 million unwanted superannuation accounts since 2015 and numbers are expected to fall by an ongoing 500,000 thanks to stapling.

In a research paper, the Association of Superannuation Funds of Australia (ASFA) tracked unwanted multiple accounts in the super system and the costs for fund members.

Stapling was one component of the recent Your Future, Your Super measures and meant members were ‘stapled’ to one fund for their whole career unless they opted to change it. This was intended to reduce people holding multiple accounts.

The loss of accounts equated to savings for the super system of around $20 million a year based on a $40 a year marginal cost of a super account.

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However, around one million people were likely to continue to have two accounts, regardless of the stapling changes, as their account balances were more than $6,000 which would cause considerable costs if they were sent to the Australian Taxation Office (ATO).

The number of lost or inactive accounts remained stagnant at around five million accounts, worth $3.6 billion.

Glen McCrea, ASFA deputy chief executive, said: “There is more work to be done to reduce the number of multiple accounts and to address the $3.6 billion in lost and unclaimed super which currently sits with the ATO”.