Retirement
Super savings under $6,000 set for new protections
Australian investors with multiple superannuation accounts or low-balance superannuation funds have been issued fresh guidance amid incoming protection laws.
Super savings under $6,000 set for new protections
Australian investors with multiple superannuation accounts or low-balance superannuation funds have been issued fresh guidance amid incoming protection laws.
The new reforms, Protecting Your Super Package, take effect on 1 July this year. They involve:
- Insurance becoming opt-in for members whose accounts have been inactive for 16 months
- Fund members with balances under $6,000 whose accounts have been inactive for 16 months will have their accounts paid to the ATO, which will chase taxpayers to consolidate
- Fee caps will be imposed on certain fees for account balances under $6,000
- Exit fees will not be charged for moving money from a superannuation account
These changes are designed to prevent super balances being eroded through inappropriate fees and insurances.
The rules are also designed to prevent multiple, unintentional low-balance accounts.
“Most consumers are not aware of the fees and insurance premiums charged to their superannuation accounts or the steps they can take to avoid unnecessary reduction in their super balance,” said ASIC commissioner Danielle Press.
“The [Protecting Your Super] changes will encourage the consolidation of multiple low-balance superannuation accounts and help ensure members have insurance arrangements that are suitable for them without unnecessarily eroding their super balance,” she said.
Warning shots
The corporate regulator has told the superannuation industry about the severity of the new changes.
Ms Press said ASIC may take action where superannuation funds are misleading in their communication to members, current and prospective.
“ASIC expects superannuation trustees to implement the changes in a timely manner and communicate responsibly. Their communications need to help their members,” Ms Press said.
“It is not appropriate for trustees to encourage all members to maintain insurance. Many members with inactive accounts will be better off allowing the insurance to lapse.
“Similarly, trustees should not be urging all members with low-balance accounts to keep their account within the fund as this may not be in the best interests of members,” she said.
RELATED ARTICLES
Superannuation
Australia's super performance test transforms investing: What's the next move?
APRA’s latest performance test has done more than name and shame lagging super options; it has rewired investment strategy, compressed fees and accelerated consolidation across the $3Read more
Superannuation
Australia's super test dilemma reform could boost long-term gains while keeping accountability sharp
APRA’s latest performance test results have reignited a structural debate: can Australia hold funds to account while still backing the nation’s long-horizon investment needs? With the government ...Read more
Superannuation
Super funds rethink strategy as APRA's performance test hits a fork in the road
The latest performance test results have reignited debate over Australia’s superannuation benchmarking regime and prompted a formal government review. Behind the headlines, boards are quietly rewiring ...Read more
Superannuation
Aware Super enhances digital tools for financial advisers, boosting efficiency and client engagement
Aware Super has unveiled a suite of new digital features designed to streamline the workflow for financial advisers and their clients. This significant upgrade includes direct data feeds to Xplan and ...Read more
Superannuation
Super funds flip the script as APRA's performance test sparks strategic overhaul
Australia’s performance test has lifted the floor on retirement outcomes—and divided the industry in the process. After early shockwaves, failure rates have fallen and fees have trended down, but ...Read more
Superannuation
Rewiring Australia’s super performance test: from compliance brake to capital engine
Can an accountability tool double as a nation-building lever? Canberra’s review of the superannuation performance test aims to preserve member protection while freeing funds to back long-dated assets ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Australia's super performance test transforms investing: What's the next move?
APRA’s latest performance test has done more than name and shame lagging super options; it has rewired investment strategy, compressed fees and accelerated consolidation across the $3Read more
Superannuation
Australia's super test dilemma reform could boost long-term gains while keeping accountability sharp
APRA’s latest performance test results have reignited a structural debate: can Australia hold funds to account while still backing the nation’s long-horizon investment needs? With the government ...Read more
Superannuation
Super funds rethink strategy as APRA's performance test hits a fork in the road
The latest performance test results have reignited debate over Australia’s superannuation benchmarking regime and prompted a formal government review. Behind the headlines, boards are quietly rewiring ...Read more
Superannuation
Aware Super enhances digital tools for financial advisers, boosting efficiency and client engagement
Aware Super has unveiled a suite of new digital features designed to streamline the workflow for financial advisers and their clients. This significant upgrade includes direct data feeds to Xplan and ...Read more
Superannuation
Super funds flip the script as APRA's performance test sparks strategic overhaul
Australia’s performance test has lifted the floor on retirement outcomes—and divided the industry in the process. After early shockwaves, failure rates have fallen and fees have trended down, but ...Read more
Superannuation
Rewiring Australia’s super performance test: from compliance brake to capital engine
Can an accountability tool double as a nation-building lever? Canberra’s review of the superannuation performance test aims to preserve member protection while freeing funds to back long-dated assets ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
