The Federal Government has introduced legislation designed to protect your super balance from being eroded by unnecessary fees and insurance costs.
The legislation is known as “Protecting Your Super.”
The legislation includes changes to fees, account transfers to the ATO and cancellation of insurance for inactive accounts.
Changes to fees
There will be a cap on fees and costs (including administration and investment fees) for accounts with a balance below $6000.
Exit fees, which are charged when you close an account, are no longer allowed to be deducted from super accounts.
Transfer of inactive low balance accounts
If an account is less than $6000 and inactive for 16 months (that means no contributions/rollovers received) or there is no activity on the account like changing beneficiaries – it will be transferred to the ATO. If your balance is transferred to the ATO you will no longer be a member of Australian Catholic Superannuation.
The ATO will attempt to reunite this super money with an active superannuation account, where the balance is more than $6000. They’ll try to do this within 28 days of receiving the super money from the fund.
If the ATO are unable to pay the super money into an active account they will hold onto that money for you and pay interest on that amount when you make a claim for those monies. Interest paid will be based on the consumer price index (CPI).
Changes to insurance
The Protecting Your Super legislation says that insurance coverage will be cancelled if there are no contributions or rollovers to a person’s superannuation account for 16 months or more from any source, like from an employer or a personal contribution.
If you are at risk of losing your insurance coverage, you would have likely received a letter from us outlining your options.
There are one of three ways you can maintain your insurance coverage, make a contribution or consolidate your accounts or make an election to maintain your insurance cover. Check out details below.
Securing your super
Ensure your superannuation account is active and remains with the fund by doing one of these:
- Make a contribution
- Elect to maintain your insurance
- Update your insurance
- Make an investment choice
- Nominate a binding beneficiary
- Consolidate your accounts
- Nominate to remain a member of our fund