Will your insurance in your Super be cancelled on July 1?
Superannuation reforms are coming in to effect from 1 July 2019. Super funds will be cancelling insurance cover and closing accounts with balances considered small and inactive, to eliminate unnecessary account erosion from fees and insurance premiums.
What’s small or inactive?
Where the balance is less than $6,000 OR no contributions have been made in the last 16 months.
Am I affected?
- If you have less than $6,000 in your account, you will be affected if you haven’t contributed in the last 16 months. Your insurance will be automatically cancelled and your superannuation will be transferred to the ATO as ‘unclaimed super’.
- If you have more than $6,000 in your account, you will be affected if you haven’t contributed in the last 16 months. Your insurance will be automatically cancelled.
- If you have more than $6,000 in your account and are contributing regularly you won’t be affected.
* the reform does not apply to certain accounts, including defined benefit accounts (such as PSS and CSS), and accounts of ADF Super members.
Why does it affect me?
If you are:
- Out of work
- On maternity leave
- A member of multiple super funds, or
- Hold an old super account which has been left open intentionally to keep default insurance cover
You could have a small or inactive account.
Once your insurance cover is cancelled, it generally can’t be reinstated. It may be much harder to get new cover to replace the old.
Accounts that are closed will be transferred to the ATO.
So what action do I need to take before 1 July to maintain my super and Insurance over?
You must contact your super fund and tell them that you want to keep your insurance. This is known as an ‘opt-in’
You can contribute to your account to keep it from being closed
Speak to a superannuation expert at MB+M
We understand some of these changes can be unsettling, so if you’re unsure about how you will be affected or what insurance cover you currently hold in superannuation, we can help guide you through the process.
Please contact our friendly team on (03) 5831 1233 or e-mail for a no obligation enquiry: firstname.lastname@example.org