Superannuation accounts changes

The Treasury Laws Amendment (Protecting Your Superannuation Package) Act 2019 was given Royal Assent on 12 March 2019.

The Act includes provisions designed to protect low-balance accounts and prevent trustees from allowing inactive accounts to be eroded by insurance premiums. They will commence on 1 July 2019.

Additional measures that are intended to prohibit opt-out insurance for members who are under 25 years old and on low-balance accounts were separated from the Bill and were not passed.

The Act caps administration and investment fees. The costs that are capped are amounts as prescribed in regulations incurred by the trustee for administration of the fund and investment of the fund’s assets and not otherwise charged as a fee.

The Act also prevents trustees from charging exit fees on all superannuation accounts, regardless of a member’s account balance.

The fee cap applies to members that have a final balance of less than $6,000 for their MySuper or choice product in an income year, even where they stop holding the product during the year.

The Act requires the transfer of all superannuation savings with balances below $6,000 to the Commissioner if an account, related to a MySuper or choice product has been inactive for a continuous period of 13 months.

The Commissioner of Taxation must use all best endeavours to unite inactive account balances transferred to the ATO with an active superannuation account of the member within 28 days.

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