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Protect your super

The Federal Government's "Protecting your Super Package" and "Putting Members Interest First Act", are designed to protect Australians' super from unnecessary erosion from fees and insurance costs.

The 'Protecting Your Super' (PYS) package came into effect on 1 July 2019. The package, which includes rules regarding fees, inactive accounts and insurance has been designed to protect Australians' super savings from unnecessary erosion by fees and insurance costs.

In addition to the PYS package, further insurance changes were made under Putting Members Interests First Act, which came into effect 1 November 2019. The aim is to help members establish a balance between using too much of their super savings to cover the cost of insurance and staying protected with the right level of insurance.

These changes mean we will need to change the way we administer some members' accounts.

PYS rules - inactive accounts

From 1 July 2019, your insurance will be cancelled if you have not opted to retain your cover and your account has not received a contribution or rollover for a period of 16 continuous months. Ongoing, we will advise all members whose account has not received contributions or rollovers at the 6, 12 and 15-month mark providing you with the opportunity to keep your cover if you wish.

Putting Members' Interests First - low balance accounts

Up until 1 April 2020, new members of the Fund receive automatic default insurance. However due to the change in rules, if your account has not become greater than $6,000 at any time between 1 November and 31 March 2020 your insurance will be cancelled on 1 April 2020.

While Insurance is an important element of your super account, it is important to note that insurance premiums are deducted from super balances which can reduce the amount of money available for retirement.

If you have a low account balance, or you are no longer receiving contributions to your account, you should consider if maintaining insurance cover is right for you. For more information about insurance in super look at ASIC's MoneySmart and search for insurance through super. If you're not sure what your needs are, try our insurance cover calculator, or if you would prefer to speak to someone our helpline and financial planning team can help.

If you wish to retain, amend or cancel your insurance cover, you can do any of the following:

If your account has been continuously inactive for 16 months, has a balance less than $6,000 and you have not opted-in to receive insurance benefits or keep your Prime Super account, it will be transferred to the ATO. Once your account has been transferred to the ATO, you will no longer be a member of Prime Super and any related benefits you have will cease.

The following actions will prevent your account from becoming inactive and being transferred to the ATO:

  • Making regular contributions to your Prime Super superannuation account either through your employer or through voluntary contributions;
  • Completing a declaration sent to you by Prime Super and then sending it to the ATO (or Prime Super who will send it to the ATO) stating that you want to retain your benefits with Prime Super.

Within 28 days of receiving your money, the ATO will try to transfer your account to an active super fund if you have one. This is likely to be the super fund account to which you make regular payments.

Check out this video to help you understand insurance through super.