You may or may not be aware about the Federal Government’s Protecting Your Super Package Act that comes into effect on 1 July 2019. The package is designed to protect Australians’ superannuation savings from unnecessary erosion by fees and insurance costs.
The legislation includes changes to fees, the transfer of inactive low-balance accounts to the Australian Tax Office, and cancels insurance for inactive accounts.
An inactive account is any account that hasn’t received any contributions or rollovers for more than 16 months.
Importantly, if a person’s insurance is cancelled they will no longer be covered.
Before taking action, your super provider must tell you that you’re at risk of having your insurance cancelled and give you the opportunity to choose to keep your insurance so you should receive a letter if your account may be “inactve”. You can stop your insurance being cancelled by letting your super provider know that you want to keep your insurance. However, your superannuation provider may find it difficult to contact you if they don’t have up to date contact details.
If you think this legislation will affect you, please take action. You can call us on (02) 9542 2904 if you would like to discuss.
Content contained in this document is general information only and is not advice, financial planning, legal or otherwise.
This document was prepared by Integrated Planning Systems Pty Limited ABN 21 051 429 184 trading as McKillop Financial Planning, an Authorised Representative of GWM Adviser Services Limited ABN 96 002 071 749 trading as MLC Financial Planning, Australian Financial Services Licensee, 105 – 153 Miller St, North Sydney NSW 2060, a member of the National Australia Bank Group of companies. The information is current as at 05 June 2019.
The article does not take into account your personal objectives, financial situation or needs. Accordingly, you should consider how appropriate the information is to you with regard to your personal circumstances. You may wish to obtain an adviser’s assistance, tax and/or legal advice to make this assessment. Before buying any financial product, you should read the Product Disclosure Statement (PDS) for that product and consider the contents of the PDS before making a decision about whether to acquire the product.
Opinions constitute our judgment at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia Group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility of errors or omissions for this document.