The Australian Government has passed new legislation, the ‘Protecting Your Super’ package, which may impact the insurance and fees for your LGS account.
From 1 July 2019, any super account that has not received any type of contribution for 16 months or more will be considered ‘inactive’ and any insurance within the account will be cancelled.
The legislation seeks to protect inactive superannuation accounts from being eroded by insurance premiums for unwanted or unneeded cover.
If you wish to keep your insurance cover, you can:
We must receive your written consent to avoid cancelling your cover against your wishes.
You need only opt-in to having insurance once. After you have opted-in, your insurance will not be cancelled in the future even if no contributions are received for 16 months or more.
If you do not opt-in, your account will need to receive a contribution at least every 16 months to ensure your account stays active and avoids the risk of future insurance cancellation. You can set up regular contributions either through direct debit or through your employer.
From 1 July 2019, the exit fee of $27.00 will be removed and you won’t be charged for withdrawing from or closing your account.
For members with an account balance of less than $6,000, certain fees and costs will be capped at 3% of your balance. The fees that will be capped are administration fees, investment fees and indirect costs.
Any amount charged in excess of this cap will be refunded.
This is to prevent super accounts with low balances from being eroded by fees.
Accounts that are considered low balance and inactive will be transferred to the Australian Taxation Office (ATO), so that the ATO can then roll them into their most recent 'active' account. Accounts that are in this category are:
Your have a few options. You can:
If you have any questions, please call us on 1300 LGSUPER (1300 547 873) between 8.30am and 5.00pm, Monday to Friday.