The Federal Government’s Protecting Your Super Package Act comes into effect on 1 July 2019. The package is designed to protect Australians’ super 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 (ATO), and stopping insurance for inactive members.
Changes to fees
- There will be a 3% cap on administration and investment fees on accounts with balances below $6,000.
- Exit fees, including fees for part withdrawals, will be banned. AustralianSuper removed exit fees on 30 March 2019.
Inactive account transfer
- If your account has been inactive for 16 months and you have a balance less than $6,000, it will be transferred to the ATO.
- An account will be considered inactive if it hasn’t received any money for 16 months in a row.
- The ATO will keep your money safe and you’ll pay $0 in fees. When you claim your lost super, any interest due will be paid to you. Interest is based on the consumer price index (CPI).
- Within 28 days of receiving your money, the ATO will try to transfer it to an active super fund if you have one, and where the transfer would take your total balance to $6,000 or more.
Things you can do
To ‘re-activate’ your account, you have a few options, including:
- making a contribution or having your employer contribute to your account
- changing your insurance
- making an investment choice
- nominating a binding beneficiary to your account, or
- combining your super accounts so your balance is $6,000 or more.
Questions about inactive accounts
Why is my account considered inactive?
Your account is considered inactive because it hasn’t received a super contribution for over 16 months, has a balance of less than $6,000 and, in the last 16 months, you haven’t had any of the following occur on your account:
- made an investment switch;
- changed your insurance cover;
- made or amended a binding beneficiary nomination, or;
- told us in writing that you’re not an inactive low-balance account member
Why ATO?The legislation states that from 1 July 2019, inactive accounts must be transferred to the ATO. Within 28 days of receiving your money, the ATO will try to transfer it to an active super fund if you have one, and where the transfer would take your total balance to $6,000 or more.
Will my money be invested at the ATO?No, however when you claim your lost super, any interest due will be paid to you. Interest is based on the consumer price index (CPI).
Will I pay any fees?No, you will not be charged any fees by the ATO.