In late February 2019, the Federal Government legislated several small changes affecting super. These changes are to take effect from 1 July 2019, although we do not expect the changes to significantly affect the majority of AvSuper members.
Inactive members – insurance will cease
|Effective from 1 July 2019, the Government requires that your insurance (death and/or disability) arrangements must cease after 16 months of “inactivity”, unless you confirm to us in writing that you wish to retain that insurance. Inactive is defined (for this measure) as 16 months without contributions of any kind.
We will be required to confirm with you at various intervals of inactivity to confirm if you wish to retain your insurance. If we do not hear from you within the 16 months, then we will cease deducting insurance premiums from your account, and your insurance cover will be cancelled at the end of the notification period.
AvSuper Comment: We recognise that many of our members value their insurance, even if they are not working and not receiving contributions for a period of time, and we will be in touch with members likely to be affected by this change in the coming weeks.
It is important to note that if your insurance is cancelled, you may not be eligible for automatic cover in future so if you subsequently require insurance cover, you may be subject to underwriting requirements and/or limitations until qualifying periods are met.
Capping superannuation fees
|Effective from 1 July 2019, superannuation fees will be capped at 3% per annum of your account balance, if your balance is less than $6,000. The new laws mean the Trustee will refund fees above the 3% cap, which will be calculated based on your account balance as at 30 June each year, or upon exiting the Fund.|
AvSuper Comment: In practice, this will likely only affect a small number of AvSuper members – namely those with account balances of approximately $3,200 or less.
Removal of exit fees
|Exit fees will also be prohibited from 1 July 2019. Since AvSuper does not charge exit fees, this change will not affect our members.|
AvSuper Comment: Those members with other super fund accounts who have not been able to consolidate their balances into AvSuper because of high exit fees in their other fund, may now want to review their situation and see if a rollover to AvSuper will now be possible.