If you haven’t yet heard, there are some superannuation legislation changes coming in to force from 1 July 2019. They’re called the Protecting your Super reforms and in most cases they will have a positive impact. For instance, fees on accounts worth $6,000 or less will be capped at 3% and exit fees on superannuation switches will be banned.
Furthermore, inactive accounts with less than $6,000 will be closed and transferred to the Australian Tax Office. The ATO will then use data matching to try and connect these accounts to an active account of the member where possible.
There’s a potential trap in the reforms, though. Another change is that superannuation providers must cancel the insurance in any super account that hasn’t received any contributions or rollovers for more than 16 months.
Many people actually keep superannuation accounts open specifically to keep the insurance cover held in the fund. They may not be able to obtain cover elsewhere due to poor health or pre-existing conditions. They might not be working and thus no employer or personal contributions are being made. These people must be vigilant and make sure they inform their super fund that they wish to keep the insurance.
Each super fund must write to effected members prior to July 1st and give them the opportunity to retain their insurance. If the opportunity is ignored, the insurance will be cancelled.
If you have insurance held in a superannuation fund, take the time to contact your financial planner to ensure you won’t be adversely effected.
Insurance is important, and losing it could be catastrophic.
For advice on your personal insurances, give Steve May Financial Services a call and start a conversation today.
You need to consider with your financial planner (or adviser), your objectives, financial situation and your particular needs prior to making an investment decision. Sensibly Pty Ltd and its authorised representatives (or credit representatives) do not accept liability for any errors or omissions of information supplied on this website
Nick Shanley, Steve May, Luke Styles and Shanley Financial Planning T/A Steve May Financial Services are Authorised Representatives / Corporate Authorised Representative of Sensibly Pty Ltd, AFSL 533923. Please refer to our website at www.stevemayfs.com.au to reference our Financial Services Guides.
