Do you have an Insurance Policy in your Superannuation Fund?
Approximately 50% of Australians have multiple superannuation funds and therefore have duplicate insurances policies, informally know as zombie insurances. These double ups add up to an over payment of $1.9 billion!
New legislation passed to protect your Superannuation
The government has passed new legislation to ensure that your super is not eaten away by these unwanted zombies. The new policy states that if you have not contributed to your super fund for 16 months or more, it will be deemed inactive. As a result, once your account is deemed inactive, the insurance cover that you hold within the fund will be cancelled.
This new measure could have an unintended adverse side effects for those who have taken time out of the workforce such as entrepreneurs ceasing regular employment, new parents taking extended maternity leave, or those on prolonged sick leave.
These groups could have a nasty surprise on making a claim. Whether it’s life or accident insurance, after 1 July 2019, they may find that they no longer have coverage due to a lack of recent contributions. This could place a significant burden on their family if they suffer serious injury, illness or death.
Ensure your Superannuation Fund stays active or send your fund a Notification…
Your super fund is required by law to send you a notification directly if your account is deemed inactive asking you for instructions on whether your super fund should retain your insurance. If you wish to retain your insurance cover, you must let your super fund know.
If you have not been contributing to super and are yet to receive notification from your super fund, please contact them directly to find out your Fund’s status.
Have zombie accounts?
You can jump onto the MyGov website and with your tax file number lodged to investigate if you have any inactive funds. If you find you have multiple funds, and you can consolidate your the duplicate super into one with the click of a transfer button.
Contact Walsh SMSF to discuss.
If you have any concerns in relation to your Superannuation, please do not hesitate to contact Scott Coghlan from our Walsh SMSF Division. He will be very happy to assist you with any queries you may have.