WA Super News
Protecting Your Super (PYS) changes ahead for your employees
Over the years, we have recommended that our members combine their multiple super accounts so they aren’t paying duplicate fees, or being charged for insurance they don’t need. While some members actively choose to have more than one super fund, often multiple accounts arise because people lose track of their super, which can result in account balances being eroded by fees and insurance premiums.
This is the sentiment of the new Protecting Your Super (PYS) legislation, which comes into effect on 1 July 2019. This new legislation is designed to prevent insurance premiums and fees eroding super balances for those members with inactive or low-balance accounts.
The new legislation covers several changes including:
- changes to fees
- accounts transferring to the Australian Tax Office (ATO); and
- cancelling insurance for inactive members.
What are the changes?
1. Changes to fees
There are two changes to fees:
- exit and withdrawal fees will no longer be charged; and
- where an account balance is below $6,000, there will be a 3% cap on investment and administration fees.
2. Accounts transferring to the Australian Taxation Office (ATO)
If your employee’s account has been inactive for 16 consecutive months and has a balance of less than $6,000, it will be closed and transferred to the ATO on either 31 October or 30 April. The ATO will then conduct a search on your employee’s behalf to find other super funds in their name.
If the ATO finds another active super account that belongs to your employee, and the joint balance will be greater than $6,000, their money will be transferred to that Fund.
How your employee's keep their WA Super account
It’s simple. If they don’t want their money to be sent to the ATO, all they need to do is ‘re-activate’ their WA Super account, by doing any of the following:
- make a personal contribution (via BPAY®) or have you the employer contribute to their account
- roll money from other super accounts into WA Super using our Find and Combine service
- make a change to their insurance cover (if you have insurance)
- make an investment switch
- nominate or change a binding beneficiary to their account
- provide written notice to the ATO Commissioner
3. Cancelling insurance for inactive accounts
Another upcoming change relates to insurance. If your employees have insurance, but they haven’t added money to their super account for 16 consecutive months (in other words they are an inactive member) they could lose their insurance cover from 1 July 2019, unless they choose to opt-in.
How your employees keep their insurance cover
- opt-in to their insurance cover by completing an online insurance confirmation form,
- if they’ve already been notified by us via letter or email, they can return the form that was sent to them; or
- reactivate their account by:
If your employees are impacted by these changes, we have written to them to outline their options and provide them the date when their insurance will be cancelled if they choose to do nothing.
If you or your employees, need any further information, please contact us on 08 9480 3500 or if they want to make any changes to their existing insurance, please complete the Insurance application or variation form.