20 May 2019
Protecting Your Super Legislation - Did you know?
Under a new law known as “Protecting your superannuation package” one of the changes designed to protect the super savings of Australians is to make sure Super account balances aren’t inappropriately eroded by the cost of insurances. This new law prevents providers from providing insurance cover if a super account is termed “inactive” – unless individuals specifically choose to keep their life cover. These change comes into play from 1st July 2019 with providers obliged to notify members on or before 1st May 2019.
Individuals will be impacted if they are deemed to have an inactive super account - that is, a super account that hasn’t received a contribution or a rollover within the last 16 months – meaning that valuable insurance cover could be cancelled. This means that individuals will no longer be protected with insurance cover and could be at risk if the unexpected happens.
There are various reasons why a member would retain their insurance in their fund and these include cost (Cheaper than their new fund) an inability to get insurance due to pre-existing health issues or a reluctance to complete personal insurance applications.
Important, where to next - If you have an inactive super account, but you’d like to keep your insurance cover - it’s really easy and the options are:
- Inform your super fund provider by the 15th June that you wish to maintain your cover confirming that you understand that the cost of the insurance will continue to be deducted from your super account. The communication you receive from your super provider will offer you with the necessary route including links to achieve this.
- Make a contribution or roll over funds to your super account.
If you require more information or would like to discuss this in detail please do not hesitate to contact your PSK adviser.