The Government has announced superannuation regulation changes in the 2018-19 Budget in relation to fees and insurance premiums.
Treasury has released for public consultation exposure draft legislation to implement the package, which contains the following elements:
- A cap on administration and investment fees charged on superannuation accounts with balances of $6,000 or less at 3 per cent of the account balance, in addition to banning superannuation funds from charging exit fees for any account;
- A requirement on superannuation funds to only offer insurance on an opt in basis in relation to accounts that have balances below $6,000 of new members who are under 25 years old or
that have not received a contribution for 13 months or longer. The changes will take effect on 1 July 2019 and affected superannuants will have a period of 14 months to decide whether they will opt-in to their existing cover or allow it to switch off;
- Changes to strengthen the ATO-led consolidation regime by requiring the transfer of all inactive accounts where the balances are below $6,000 to the ATO. The ATO will be given powers to reunite ATO-held accounts with the member’s account where possible.
The Budget confirmed that the maximum number of allowable members in new and existing self-managed superannuation funds (SMSFs) and small APRA funds will be expanded from 4 to 6 members from 1 July 2019.