Under the new Protecting Your Superannuation initiative, unnecessary fees being charged to Australian super funds will be significantly reduced from 1st of July. This sounds like a good thing, right?
What you might not realise is that the legislation also dictates that all super funds with balances of less than $6,000, or that haven’t been paid into in the last 18 months, will be closed on this date, unless you let your super fund provider know otherwise. Basically, if you are self-employed, unemployed, casually employed, or on maternity leave, your hard-earned super could be at risk!
As an extension of this, any insurance policies associated with your super fund could also be voided, including Life Insurance, Total and Permanent Disability Insurance, or Income Protection. When active, these pay you and/or your family a lump sum or ongoing smaller payments if you die or are no longer able to work.
To add insult to injury, you also may not be eligible for coverage under a new policy should your current one be cancelled, especially if you have suffered from mental illness, sought medical treatment, begun taking a new medication or undergone genetic testing since you first took out your current (soon to be former) policy, due to these being considered as “pre-existing conditions”, thus making you ineligible for any kind of pay-out should you be forced to make a claim.
So act now, and fast!
What should you do?
1. Link your myGov account to the ATO and do a search for lost super.
2. Contact your super fund(s) to find out what insurance you currently have.
3. Instruct your fund in writing that you do not wish to have your insurance cancelled at this time (or make a contribution into your super account).
4. Conduct a full review of your insurances to make sure you are adequately covered. Get professional assistance here if required.
5. Decide whether you need to keep your existing super insurance and if not, advise the fund to cancel it.
Ensure that you will not be left in the lurch after 1st of July.