The Government's 'Protecting Your Super' package - announced in the 2018-19 Budget - is a comprehensive package of regulatory reforms designed to protect Australians' superannuation savings from undue erosion by fees and insurance premiums.
The legislation involves:
- On 1 July 2019, cancelling insurance cover within superannuation funds which have been inactive for 16 continuous months or more - unless the member instructs the Trustee in writing to keep their insurance cover (a super fund is inactive if a contribution or rollover has not been received for a continuous 16 month period).
- Accounts which have been inactive for 16 months or more, have balances of less than $6,000 and don't hold insurance may be transferred to the Australian Tax Office (ATO) starting from October, subject to some exceptions.
This could affect farmers, self-employed people, parents on maternity leave or people who do not have regular contributions made to their superannuation fund. If you have not made a contribution to your superannuation fund, the insurance cover within your superannuation fund may be cancelled.
This can be a big issue for those who may not be able to obtain new insurance cover due to their medical history.
Think this might affect you?
Contact one of our financial advisers as soon as possible. They can review your superannuation and insurance to help you understand if you will be affected and what you can do.
Changes come into effect from 1 July 2019, so we recommend that you act now.