The “Protecting Your Super” bill has now been enacted through the Federal parliament.
From 1st July 2019, super fund members with an “inactive” account (ie where there has been no activity as described below, for at least 16 months), will find that:
- If the account balance is less than $6K and has no associated life insurances, funds will be rolled to the Australian Tax Office. Eventual consolidation with an active account is the objective.
- In all other cases, where the account is greater than $6K and/or supports life insurances, the member will be notified by the super fund of its requirement to cease the life insurances (and rollover to the tax office if the balance <$6K).
Therefore, to avoid the rollover to the tax office or to retain the life insurances, it is critical that members either:
- Avoid their account becoming inactive by making a contribution, rollover, (changing investment options, insurance arrangements, a binding death benefit nomination etc may suffice) at least every 16 month period.
- Instruct the super fund to retain their life insurances.
- Instruct the tax office not to rollover the small balance account. (A form is being drafted for this purpose)
I would urge members to be proactive and contact the super fund now rather than relying upon notification from them.