For most of us, it shouldn’t be too much trouble to get our accounts back in our possession, but for another small group they’ll remain in limbo regardless.
Do you have a child, sibling, relative or friend who has left Australia permanently?
If they haven’t already made an attempt to take their superannuation with them, I’ll spare them the trouble because it’s impossible to do.
If you’re an Australian citizen or have been a permanent resident with the ability to return to Australia to retire, your superannuation remains tethered to Australia.
There’s not even a provision to allow a transfer to a similar retirement account or pension system in another country.
Back in 1998 the rules were changed to treat those who’ve permanently left the same as those residing in Australia – they have to wait until preservation age to access their money.
And those with small account balances face a special indignity, like a client who contacted us regarding their child’s superannuation.
Their child had permanently left Australia and up to this point their small balance was being frittered away by fees.
Come December 31, their inactive account will be subject to being tipped into government coffers which rewards them with meagre CPI growth.
The only option available in this situation is a minimum contribution each year from the account holder and the cancellation of any insurance policy within to lessen the impact of fees.
Even so, it’s a potentially frustrating process when that money could be transferred to the person’s adopted country and put to work in their preferred retirement vehicle.
Finally, as I wrote back in October, Australian Finance Group’s September figures revealed a four year high in borrowers taking out fixed rate mortgages.
And since that September high we’ve had two interest rate cuts with potentially more to come.
It’s another lesson for those trying to guess the direction of any financial market.
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL/ACL 224543, www.mfg.com.au This information is general in nature and readers should seek professional advice specific to their circumstances. Need help with your financial your financial future, we think we’re the best financial advisor in Australia. Think you need a lawyer for a superannuation claim? Think again!
