Government changes to protect superannuation
01 April 2019
The Government’s Protecting Your Super legislation comes into effect on 1 July 2019 and includes some key changes that may have an impact on your employees super accounts.
As BUSSQ’s CEO Linda Vickers highlights below in the short video on these changes, BUSSQ is here to help you and your employee through these changes and with the impacts they have particularly on insurance.
The Protecting Your Super reforms are designed to ensure that arrangements for insurance in superannuation are appropriate and that fund members are not paying for insurance cover that they do not know about or premiums that inappropriately erode their retirement savings. As part of the Protecting Your Super reforms, superannuation funds will be unable to provide insurance by default when an account has been inactive for more than 16 months.
From 1 July 2019, the Superannuation Industry (Supervision) Act 1993 (SIS Act) prevents a superannuation fund from providing or maintaining insurance for its members holding a MySuper or choice product if the account has been inactive for 16 months or more, unless the member either:
- makes a contribution or rollover to their account;
- or elects in writing to maintain the insurance.
Funds must notify a member once their account has been inactive for 9, 12 and 15 months, giving the member an opportunity to take steps to maintain their insurance cover if they wish.
We are contacting members throughout May and June to ensure they are fully aware of the implications of the Protecting Your Super reforms and we are asking members to assess their insurance cover and take action.
Your employees should check their super accounts, and if they’ve got more than one account with multiple funds, make sure the insurance cover they have is what they want or need.
Other legislation changes include:
- caps fees on low balance accounts (under $6,000) at a maximum of 3 per cent of the account balance and bans exit fees when you withdraw all or part of your super account from 1 July 2019; and
- requires funds to transfer inactive low balance accounts (under $6,000) to the ATO so they can be reunited with a members “active” account. The first ATO transfers of low balance inactive accounts will occur in November 2019
Find out more about these and other changes BUSSQ are implementing from 1 July. If you have any queries contact your dedicated Account Manager or call 1800 69 2877.
CEO Snapshot - Important changes to your employees’ super