During the last three months there has been a flurry of political activity, including the new budget and the Federal election. Amidst all the activity, you may have missed the recent Protect Your Super legislation that was passed in April, which may impact your super.
The Protect Your Super Package includes some changes that came into effect on the 1st July. Read on for a summary of the key headlines from this legislation and the new budget, detailing how each might affect you.
Cessation of Insurance on Inactive Accounts
Members with an insurance policy attached to their super who have not received contributions in the last 16 months, are likely to have their insurances cancelled. The intention is to protect account balances with a lack of contributions from having their retirement savings eroded.
This is a great opportunity to find out what insurance you may have with your super account and to make a decision that’s right for your circumstances. If you are concerned that insurance will be cancelled without your knowledge, feel free to contact our Member Care Team. Christian Super members can expect to be contacted at various points leading up to the cancelation of insurances to ensure you are aware of the pending change to your account.
Inactive Low Balance Accounts
Inactive accounts with a balance less than $6,000 will be transferred to the ATO, with the intention of protecting these balances from fees and charges which may erode them over time. The ATO will either combine these with any other unclaimed funds you may have, or they will be transferred to another fund if you have an active superannuation account with a balance greater than $6,000.
3% Cap on Fees
There is now a fee cap of 3% to protect members with low account balances. If you have ess than $6,000 in your superannuation account, you will not pay more than 3% of your account balance in fees each year. The 3% cap includes administration fees, investment fees and indirect costs, but excludes insurance premiums.
Ban on Exit Fees
Exit fees have now been removed by all superannuation funds. This means that you will no longer pay a fee to transfer funds if you consolidate your super accounts.
Work Test Exemption
These latest changes allow members aged 65 to 74 to be able to continue to make voluntary contributions for an extra year after the year in which they have last met the work test. In addition, for members aged 65 and 66 there is an increased period in which they can access the ‘Bring Forward’ rule allowing them to use three years’ worth of their cap.
The changes outlined above demonstrate a clear intent to protect low balance accounts from being eroded by fees and charges, as well as increasing options to contribute toward your super to prepare for retirement. The government is looking to protect members retirement funds so that members can retire with more to enjoy later in life.
We at Christian Super are supportive of the government’s changes as we have always been committed to maximizing our members’ retirement outcomes. For more info about these changes, we encourage you to check out the Time To Check website.
If you have any questions about your super account, please feel free to contact our Member Care Team on 1300 360 907 (Mon-Fri 9am-6pm AEST) or email: firstname.lastname@example.org