Protecting Your Super
The Protecting Your Super (PYS) legislation was introduced by the Federal Government in response to the Royal Commission into Banking and Financial Services and came into effect on 1 July 2019.
The PYS legislation is intended to protect the super balances of all Australians and has altered the fees funds can charge, implemented the transfer of inactive low-balance accounts to the Australian Tax Office (ATO) and introduced cancellation of insurance for inactive members.
It’s important for you to be aware of these ongoing changes, as they may have a significant impact on your financial future.
What do these changes mean for you?
Reduction in fees
- Super funds will no longer charge exit fees
- There is now a 3% cap on both administration and investment fees for accounts with balances of less than $6,000.
Changes to insurance
If your Statewide Super account is;
- inactive for a continuous period of 16 months, and
- you do not elect in writing to hold insurance in your account;
then the insurance provided through your superannuation account must be cancelled. Your account will be considered ‘inactive’ if it has not received a contribution or rollover for a continuous 16 month period.
Inactive, low-balance accounts transferred to the Australian Tax Office
Statewide Super may be required to transfer the balance of your account to the Australian Tax Office (ATO) if it is classified as an ‘inactive low-balance account’, as your account:
- has not received any contribution or rollover for a continuous period of 16 months; and
- has a balance of less than $6,000.
If the ATO identifies that you have an active account with another fund and by transferring your Statewide Super balance to that active account, such that your account will have a total balance of $6,000 or more, the ATO will reunite your superannuation into the active account within 28 days of receiving the transfer.
If the ATO is unable to identify that you have an active account, your money will be retained by the ATO. You will not be charged any fees during this time.
When you claim your super being held by the ATO you will be paid interest based on the Consumer Price Index (CPI) at that time.
The ATO identifies an account as not being an inactive low-balance account if in the last 16 months you have:
- changed your investment options
- made changes to your insurance coverage
- made or amended a binding beneficiary nomination
- made a written declaration that you are not a member of an inactive low-balance account
- an amount owed to the super provider.
For more information on inactive, low-balance accounts visit the ATO website.
Frequently Asked Questions