Powered by momentummedia
nestegg logo
Powered by momentummedia
Powered by momentummedia
nestegg logo
nestegg logo

 

 

Retirement

Superannuation changes 2019-20

  • December 26 2019
  • Share

Retirement

Superannuation changes 2019-20

By Zarah Mae Torrazo
December 26 2019

To protect low-balance super accounts from unnecessary erosion due to excessive fees and insurance, the Treasury Laws Amendment (Protecting Your Superannuation Package) or PYSP Act 2019 was brought in by the government. 

The package of reforms amends the Superannuation Industry (Supervision) Act 1993 (SIS Act), Superannuation (Unclaimed Money and Lost Members) Act 1999 (SUMLM Act) and Taxation Administration Act 1953 (TAA 1953). 

Here’s an overview of the changes that are now in effect:

Super accounts with balances below $6,000 that are inactive (meaning they have not received any contributions, rollovers or other transactions for 16 consecutive months)  will be terminated. The funds in these accounts will be transferred to the Australian Taxation Office to allow it to consolidate the fund with a member’s active account.

Annual investment and administration fees are now capped at 3 per cent of the account balance. This applies to accounts with balances that are below $6,000. 

Super funds are prohibited from charging exit fees. This means that they cannot charge you a fee for consolidating your account or moving a part (or all) of your money to a different fund.   

Super accounts with insurance and have been inactive for 16 consecutive months will have their insurance terminated.  

With these changes in place, there are steps you must consider to get the best out of your super. 

For example, if you have an inactive super account with insurance, you should decide if you want to keep it. Some people may want to keep a low super balance to cover insurance premiums. Other people choose to do so to pay for something they no longer want or they didn’t know they had. If you do want insurance to be included in your super, then you must take proactive steps to not to let it lapse. 

It’s also a good time to assess the fees charged by your super fund. You may already have a super provider that is charging you less than 3 per cent in fees and does not impose exit fees.  Other super funds may charge you account-based fees, so check if you are paying duplicate fees. 

If you have an inactive account and want to maintain it (keep your insurance and/or keep your low-balance super account), there are also steps you must take. You can choose to reactivate your super account by paying money into it or notifying your super fund that you want to opt in to keep your insurance or opt out of consolidating your low-balance super account.

Learn more about the latest super reforms and what they could mean for you. Explore nestegg now!

Superannuation changes 2019-20

author image
  • December 26 2019
  • Share
superannuation changes
Click here to enlarge

To protect low-balance super accounts from unnecessary erosion due to excessive fees and insurance, the Treasury Laws Amendment (Protecting Your Superannuation Package) or PYSP Act 2019 was brought in by the government. 

The package of reforms amends the Superannuation Industry (Supervision) Act 1993 (SIS Act), Superannuation (Unclaimed Money and Lost Members) Act 1999 (SUMLM Act) and Taxation Administration Act 1953 (TAA 1953). 

Here’s an overview of the changes that are now in effect:

Super accounts with balances below $6,000 that are inactive (meaning they have not received any contributions, rollovers or other transactions for 16 consecutive months)  will be terminated. The funds in these accounts will be transferred to the Australian Taxation Office to allow it to consolidate the fund with a member’s active account.

Advertisement
Advertisement

Annual investment and administration fees are now capped at 3 per cent of the account balance. This applies to accounts with balances that are below $6,000. 

Super funds are prohibited from charging exit fees. This means that they cannot charge you a fee for consolidating your account or moving a part (or all) of your money to a different fund.   

Super accounts with insurance and have been inactive for 16 consecutive months will have their insurance terminated.  

With these changes in place, there are steps you must consider to get the best out of your super. 

For example, if you have an inactive super account with insurance, you should decide if you want to keep it. Some people may want to keep a low super balance to cover insurance premiums. Other people choose to do so to pay for something they no longer want or they didn’t know they had. If you do want insurance to be included in your super, then you must take proactive steps to not to let it lapse. 

It’s also a good time to assess the fees charged by your super fund. You may already have a super provider that is charging you less than 3 per cent in fees and does not impose exit fees.  Other super funds may charge you account-based fees, so check if you are paying duplicate fees. 

If you have an inactive account and want to maintain it (keep your insurance and/or keep your low-balance super account), there are also steps you must take. You can choose to reactivate your super account by paying money into it or notifying your super fund that you want to opt in to keep your insurance or opt out of consolidating your low-balance super account.

Learn more about the latest super reforms and what they could mean for you. Explore nestegg now!

Superannuation changes 2019-20
default
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article

more on this topic

more on this topic

From the web

Recommended by Spike Native Network

More articles

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.