Protecting your super
The Federal Government’s Protecting Your Super reforms came into effect on 1 July 2019.
legalsuper confirms that in compliance with the Federal Government’s Protecting Your Super Package, any monies held in superannuation accounts which are inactive, low balance or unclaimed are transferred to the Australian Tax Office (ATO).
We make this statement following House Economic Committee hearings in Federal Parliament, and subsequent media reports, which refer to the transfer of inactive or low balance superannuation accounts by some super funds to AUSfund, an eligible rollover fund.
legalsuper members can be assured that inactive or low balances have been transferred to the ATO in compliance with the Federal Government’s Protecting Your Super package.
The reforms are designed to protect super from unnecessary erosion by fees and insurance costs. The reforms include changes to fees, the cancellation of insurance for inactive members and the transfer of inactive low-balance accounts to the Australian Tax Office (ATO).
Changes to fees
Cap on administration and investment fees on account balances of less than $6,000
From 1 July 2019, the administration and investment fees charged for accumulation accounts with a balance of less than $6,000 will be capped at 3% per annum. If this applies to you, legalsuper will refund fees charged in excess of 3% per annum.
Removal of Exit fees on a payment/rollover from your account
Currently, legalsuper charges an Exit fee of $50. From 1 July 2019, this fee will no longer be charged as exit fees for all payments and rollovers will be removed.
Changes to insurance
From 1 July 2019, where an accumulation account has been inactive (i.e. no contributions or rollovers have been received) for 16 months or more, your insurance cover will be cancelled unless legalsuper has been advised by you to maintain it, regardless of your account balance.
If you are affected by this change, legalsuper has written to inform you. You can check your correspondence from us by logging in to MemberAccess.
Your 2018/19 Annual Statement details your insurance cover as at 30th June 2019. Since then your cover may have changed due to the Protecting Your Super reforms which came into effect on 1st July 2019. We encourage you to check your current insurance cover and correspondence sent to you by logging in to MemberAccess.
How to keep your insurance:
- Login to MemberAccess and update the ‘Insurance Opt-in’ option (located at the bottom of the Personal Details section); or
- Complete and return the Election to Maintain Insurance Cover form to email@example.com.
Election to maintain insurance requests
If you have provided an instruction to maintain your insurance, a letter confirming the retention of your cover will be issued to you within 4 weeks. If there is an issue with your instruction, we will respond to you as soon as possible.
Reinstating Cancelled cover
If your insurance cover has been cancelled due to these reforms, you may be eligible to apply to reinstate your cover within 60 days of the date your cover ends. Conditions apply. We will be in contact with you in writing if your cover has ended with further information, you can also contact us on 1800 060 312.
If it is more than 60 days after your insurance cover has been cancelled, you will need to go through additional processes in order to apply to reinstate your insurance.
Delays and longer wait times
Please note that the number of requests received has been extremely high, this is causing significantly longer response times to our emails, phone calls and letters. We appreciate your patience, and apologise for the inconvenience.
If you do not wish to maintain your insurance cover
You can cancel it at any time by contacting legalsuper. If you do intend to cancel your cover or if your cover is cancelled automatically, please note the following:
- you will not be able to make a claim for insurance benefits for events or conditions that arise after your cover has been cancelled;
- we will no longer deduct insurance fees from your account;
- your ability to restart your cover may be subject to health assessment and acceptance by the insurer, and you may not be able to get cover;
- if you intend to replace your cover with alternate cover, you should not cancel until the replacement cover is in place; and
- you should get independent financial advice to help you make a decision on cancellation.
If you would like to speak with us sooner, call us on 1800 060 312 between 8am and 8pm (AEST) Monday to Friday. You can also manage your account online.
Inactive account transfer
If your account has been inactive for 16 months and you have a balance of less than $6,000, it will be transferred to the ATO. An account is considered inactive if it hasn’t received any money for 16 consecutive months, there is no insurance provided by the account and the member has not demonstrated engagement with legalsuper, such as by changing insurance or investment arrangements or changing or making a binding death benefit nomination. If your account is transferred to the, ATO, 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.
‘Re-activate’ your account
If you wish to keep your account 'active' to stop it from being transferred to the ATO, you can:
- make a contribution or ask your employer to contribute to your account;
- update your insurance to suit your personal needs;
- make an investment choice which suits your personal needs;
- nominate a binding beneficiary to your account, or
- consolidate your super accounts so your balance is $6,000 or more.
Market volatility update
At the time of writing, the impacts of the Coronavirus are escalating. This update is to keep you informed of rapidly changing situation and the potential impacts on superannuation investments.
Share market volatility
How does recent market volatility affect your super? As with any long term investment, your super will be exposed to many market cycles. It’s reasonable to expect a decrease in growth for Q1/Q2 2020, but keeping a long-term focus will show smoother, steady growth.