On 1 July 2019, the Government’s ‘Protecting Your Super’ legislation became effective. The changes were designed to protect peoples’ superannuation and related to insurance cover, fees and lost super accounts.
On 1 April 2020, the next round of reforms will start. Called ‘Putting Members’ Interests First’ (PMIF), they’re designed to prevent small account balances from being unnecessarily reduced by insurance premiums.
This means that from 1 April 2020, super funds can no longer provide default insurance to new members who are under the age of 25 or to members with a ‘low balance’. A member is considered to have a low balance if, from 1 November 2019, their account balance has never reached $6,000.
Currently, members who join their employer’s super plan automatically receive insurance cover regardless of their age or account balance.
Answer the questions below to find out how the new rules affect you.
When was your super account opened?
Before 1 April 2020
On or after 1 April 2020
How was your account opened?
On an application form
Default through my employer
Are you under 25?
Has your account balance always been under $6,000?
Have you opted in to retaining your insurance prior to 1 November 2019, even if you don’t receive contributions into your account?
Your insurance will continue on your account, subject to the payment of premiums. You can cancel your cover at any time
Have you specifically requested insurance or made a change to your insurance before 1 November 2019?
Any insurance attached to your account will remain provided you:
Has your account balance reached $6,000 at any time post 1 November 2019?
Have you received an insurance inactivity notice from us?
Your insurance will be cancelled on the earlier of:
Your insurance will be cancelled on 1 April 2020 unless:
You may receive default insurance cover when:
Any insurance attached to your account will remain provided to you:
If your super account includes insurance but your account balance has not reached $6,000 at any time since 1 November 2019, your cover will be cancelled on 1 April 2020 unless you ‘opt in’.
To opt in, login to your account, navigate to the insurance section and select ‘opt in’.
You will also be considered ‘opted in’ if you made any of the following changes before 1 November 2019:
If you joined your employer’s super fund after 1 April 2020 you won’t be provided with insurance automatically if you are aged under age 25, or if you have a low account balance. Once you reach age 25 and have a balance of $6,000, the fund may provide you with insurance automatically, subject to certain conditions.
You can choose to ‘opt-in’ to have insurance at any time. If you opt in, you will receive a default level of insurance cover regardless of your age or account balance and insurance premiums will be deducted from your super account to cover the cost of the insurance.
For more information, please read the FAQs about PMIF rules which discuss cancellation of insurance on 1 April 2020.