Tax office to handle lost superannuation

Superannuation held in eligible rollover funds will be gradually transferred to the tax office so Australians don't lose their money.

The federal government has on Thursday introduced legislation to parliament which would force eligible rollover funds with less than $6000 to be transferred to the Australian Tax Office by the end of June.

Accounts with more than $6000 would have another year.

The draft legislation would also allow the tax commissioner to then reunite the money to a person's existing superannuation account.

New eligible rollover funds will be banned once the bill becomes law, and superannuation providers won't be able to transfer money into existing rollover funds.

The proposal comes after a Productivity Commission review into superannuation found eligible rollover funds weren't successful in reuniting members with their lost super.

The commission recommended the ATO be responsible for holding lost superannuation.