You might already be aware of the upcoming changes to superannuation legislation, coming into effect on 1st April 2020. If not, it’s important to read on to find out if you are affected by these changes.
The ‘Putting Members Interests First (PMIF)’ legislation may impact your level of insurance coverage, previously provided by your super fund.
Those impacted will see changes to the default insurance coverage (e.g. default income protection) provided by superannuation funds for members with a low balance and/or inactive account.
Unfortunately, PMIF is set to disproportionately affect low wage earners, workers in insecure or casual work, workers with multiple employers/multiple funds, young workers and workers in high-risk services.
Read the following scenarios to determine if you may be impacted by these changes:
If you joined a superannuation fund on or before 1 November 2019 and your superannuation balance is below $6,000 or is deemed inactive, you will have your insurance cancelled on 1 April 2020 unless you specify to your fund you want to keep it.
If you joined a superannuation fund after 1 November 2019 and your automatic cover commenced before 1 April 2020, you will have your insurance cancelled on 1 April 2020 if your account balanced has remained below $6,000 during that time.
If you join a superannuation fund on or after 1 April 2020 you will not be given automatic cover until you have a balance of at least $6,000 and for younger workers, once you reach the age of 25 years+. If this is you, you will need to request insurance cover if you want it.
Default insurance that members may have through your super fund is an incredibly valuable safety net for both you and your family, if something were to go wrong.
If you think you might be affected by these changes, it’s really important that you contact your superannuation fund as soon as possible to discuss your options.
You can also take the opportunity to find out whether you have more than one super fund and amalgamate any existing funds into one to ensure you’re receiving the most benefits.