Home' Superfunds : Superfunds March 2019 Contents ‘PROTECTING YOUR SUPER PACKAGE’ AND ‘PUTTING MEMBERS’
The Treasury Laws Amendment (Protecting Your Superannuation Package)
Bill 2018 (“PYS Bill”) has now been passed by Parliament with significant
amendments. The Bill seeks to implement the Government’s ‘protecting your
super’ reforms, by modifying the circumstances in which insurance can be
offered to members, imposing caps and a prohibition on the charging of
certain fees, and expanding the circumstances in which inactive, low-balance
accounts must be transferred to the ATO for consolidation. These reforms
were announced by the Government in its May 2018 Budget.
The PYS Bill passed through the Senate in mid-February, with detailed
amendments made by the Greens in agreement with the Government and
later accepted by the House of Representatives.
In particular, the amendments:
• remove from the Bill provisions which would have made insurance opt-
in for members under age 25 and for low-balance accounts (provisions
effectively requiring members with inactive accounts to opt-in for
• extend the period of inactivity for an ‘inactive account’ and an ‘inactive
low-balance account’ from 13 months to 16 months and prescribe a
list of member actions that will mean the account is taken not to be an
inactive low-balance account
• require the ATO to pay inactive account balances transferred to it under
the new rules to an active account for the member, where satisfied it is
possible to do so, within 28 days.
There were no amendments to the provisions in the Bill that impose a cap
on administration and investment fees charged to members and prohibit the
charging of exit fees. The commencement date for the PYS measures remains
at 1 July 2019.
On 22 February, Treasury released a draft of regulations to implement
the reforms in the PYS Bill, with submissions closing 1 March. The draft
regulations address the details of certain notices that trustees must give
to impacted members, administration of the fee cap, and how the ATO
will determine which fund a member’s low-balance account should be
consolidated into, where the member has more than one active fund.
On 20 February the Government introduced into Parliament the Treasury
Laws Amendment (Putting Members’ Interests First) Bill 2019 (“PMIF Bill”), to
progress the insurance reforms that were removed from the PYS Bill by the
The PMIF Bill includes amendments that prevent trustees from providing
insurance on an opt-out basis to members who are under 25 years old and
begin to hold a new choice or MySuper product on or after 1 October 2019,
and to members who hold products with balances below $6,000. In all
circumstances, the member may opt-in to insurance by making a direction to
the trustee. The new measure builds on reforms implemented by the PYS Bill.
The explanatory material indicates that, generally a person who is under
25 years old and who began to hold a MySuper product or choice product
before 1 October 2019 will not be impacted unless the product had, as at
1 July 2019, been inactive for 16 months or the balance of the product had
not been more than $6,000 since that date. However, the measure will apply
to members who hold a product on 1 October 2019 which has not had
a balance of $6,000 or more since 1 July 2019. The amendments impose
obligations on trustees to notify members who have insurance arrangements
in place before 1 October 2019 and who might be affected by the new
measure to provide these members with an opportunity to elect for their
insurance to continue.
The PMIF Bill remains before the House of Representatives, awaiting
The Treasury Laws Amendment (Improving Accountability and Member
Outcomes in Superannuation Measures No 1) Bill 2017 (‘Member Outcomes
Bill’) has been passed by the Senate with significant amendments, and now
awaits consideration by the House of Representatives. The Bill proposes a
wide range of reforms intended to enhance trustee accountability.
The Member Outcomes Bill was passed by the Senate in mid-February,
with detailed amendments made by the Government, Opposition and
Greens. The key amendments made in the Senate:
Superfunds March 2019
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