Important information about changes to super

As reported in the last edition of broadcast, the Government introduced new rules for superannuation that came into effect on 1 July 2019 which may affect you and your employees.

What do your employees need to know about these changes?

Insurance cancelled on inactive accounts

 

Insurance may have been cancelled on inactive accounts (accounts that haven’t received a contribution or rollover for the last 16 months) if employees didn’t opt in to keep their insurance. Employees wishing to maintain their insurance cover during a period of inactivity can still opt-in for insurance by contacting us or by visiting cbussuper.com.au/opt-in.

Fee cap

 

A 3% annual fee cap (administration, investment and other fees) now applies to accounts with a balance of less than $6,000*.

Inactive low balance account transfers

 

Inactive low balance accounts^ (less than $6,000) are to be closed and funds sent to the ATO with the aim of consolidating and redirecting member funds to active super accounts.

Exit fees abolished

 

Super funds are no longer able to charge exit fees when members withdraw money or rollover money to another super fund.

The Government is also proposing further amendments to insurance from 1 October 2019 that would see new members under 25 years of age and those with account balances of less than $6,000 losing automatic insurance cover and instead having to opt in for cover. Cbus will continue to advocate for our members to ensure young workers in particular retain these important protections.

We will continue to keep you updated about this important draft legislation.

*For the fee cap this means you have less than $6,000 invested in the Growth (Cbus MySuper) other investment option which has not received a contribution or rollover in 16 months.

^For inactive low balance account transfers to the ATO this means you have less than $6,000 invested in the Growth (Cbus MySuper) option or other investment option which has not received a rollover or contributions in 16 months.

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