Whilst many Australians hold only one super account, there are many who hold multiple. Across the board the balances in these super accounts are often smaller and/or the account is no longer receiving contributions. The member is sometimes unaware that they have insurance cover within their super.
The Federal Government introduced the Protecting Your Super (PYS) Package Act on 1 July 2019. The PYS package is designed to protect members with smaller super balances from having their benefits eroded by fees and insurance premiums. Some of the key reforms covered by the package include:
- Super accounts with balances under $6,000 that are inactive for a period of 16 months, i.e. they have not received any contributions or rollovers, will be closed;
- Exit fees on super accounts will be banned. This means you can rollover or transfer your super to a different fund without being charged a fee;
- Super accounts with insurance that have been inactive for 16 months will have the insurance cancelled unless the member opts-in to keep it.
Whilst on the whole this will help protect the consumer, you need to be aware of these changes as non-response to communications may result in a loss of benefits to you.
If you are impacted by the above you will receive correspondence from your superannuation fund explaining the options available. If you receive this communication it is important that you read and action any requests. If no action is taken and this relates to insurance, your policy will be cancelled and you will be left without cover.
If you have any questions or concerns regarding these reforms or the communication you have received please contact your adviser who can provide guidance.
Please note this article provides general advice only and has not taken your personal, business or financial circumstances into consideration. If you would like more tailored advice, please contact us today.