Industry Fund Services recovers record $250 million in unpaid super

Industry Fund Services (IFS) has recovered a record $250 million in unpaid superannuation in the 2025-26 financial year, bringing its total recoveries to $2.5 billion since the service commenced.

The recovery comes just a month after the Payday Super reform went live from July 1, requiring employers to pay their employees’ superannuation at the same time as their salary and wages. While the Payday Super reform applies prospectively from the new financial year, existing quarterly rules continue to govern superannuation entitlements accrued up to June 30, 2026. This creates a complex environment where a significant pool of historical unpaid super remains outside the scope of the new rules.

IFS executive manager of super recoveries Natalie Lister said the new legislation is a significant step forward, providing funds and members with greater real-time insight into missing payments. She noted that while the reforms improve visibility, they do not address the billions of dollars in historical unpaid super still owed to Australian workers.

“Payday Super is one of the most significant superannuation reforms in decades, and we strongly support it,” Lister said. “However, it doesn’t address the billions of dollars in historical unpaid super still owed to Australian workers, nor does it remove the cashflow challenges many businesses face.”

Where employers carry legacy super arrears, there is also a risk that new Payday Super contributions may be applied against older outstanding balances. This application can potentially create confusion about an employer’s overall superannuation compliance position, despite historical arrears remaining.

IFS is developing intelligent automation, AI-enabled analytics, and integrated data capabilities designed to improve recovery outcomes and reduce costs for clients as they adapt to the new regime.

As long as those pressures exist, there will continue to be instances of unpaid super, making recovery services an important safeguard for members’ retirement savings. The organization attributes its ability to track down these funds to continuous investment in advanced recovery technology.

The service recently addressed a specific case involving outdated death benefit nominations, dropping outdated nominations to ensure members’ wishes are met. This action highlights how technical adjustments in fund administration can have direct financial impacts on members.

IFS executive manager of super recoveries Natalie Lister noted that continuous investment in advanced recovery technology helps the organization handle these complex scenarios. She emphasized that technology is essential for identifying and retrieving funds that would otherwise be lost.

Super Members Council (SMC) analysis showed Australians missed out on $24.4 billion in unpaid superannuation in the five years to 2023.

“This achievement reflects the continued dedication of our team and the trust our clients place in us. Behind every dollar is a real person’s retirement, and our focus has always been on getting that money working for them as soon as possible,” Lister added.

IFS said it continues to invest in advanced recovery technology, including intelligent automation, AI enabled analytics and integrated data capabilities designed to improve recovery outcomes for members, reduce costs and support clients as they adapt to Payday Super.

“These initiatives align with IFS’ broader mission to modernise operations and empower the profit-to-member superannuation industry as it adapts to Payday Super,” IFS said.

IFS is a wholly owned subsidiary of Industry Super Holdings (ISH) and ISH is owned by a number of shareholders including some industry superannuation funds.