The rules have changed

16-Sep-2019

There are two types of people. The ones who regularly check in on their super to keep everything in tip top shape. Then there’s the rest of us. But if there’s one time when you should be extra vigilant, it’s right now. This is because recent super reforms have the potential to impact your retirement savings. Understanding what this legislation means for you and how you can make the appropriate adjustments will ensure your super continues to grow.  


The Federal Government’s Protecting Your Super package1 came into effect on 1 July 2019. The changes - including rules regarding fees, inactive accounts and insurance - are designed to protect Australian super accounts from being unnecessarily eaten up by insurance premiums and fees. For young people who may have seen their super savings decline, the changes are a welcome addition. On the other hand, these reforms have the potential to disadvantage others - particularly those taking a break from work, employed in a contract role or working overseas. With this in mind, we’ve compiled the four major changes to super rules now in place and how they might affect you. 

Changes to insurance

Most people have default insurance in their super to cover them for death, total and permanent disability and sometimes income protection. But, if you haven’t contributed funds to your super account in over 16 months and haven’t elected to maintain your insurance, your cover could be automatically cancelled. This is regardless of your age or account balance. 

Automatic account transfers

Members now also face the possibility of their super account being transferred to the Australian Taxation Office (ATO) if their account is continuously inactive for 16 months, or has a balance of less than $6,000. This is because the account may be considered an inactive low balance account. The ATO will then auto-consolidate the balance into an active account, if you have one, where the combined balance is greater than $6,000. If this is not possible, the balance will remain with the ATO until you claim it.

Cap on fees for low balance accounts

One of the positives to come out of the reforms is a new cap on fees charged within super accounts that have a balance of $6,000 or less. Fees are now capped at 3% per annum, ensuring smaller funds aren’t eroded by fees and charges. As a result, some VISSF members may see fee reductions in their accounts. 

All exit fees banned

Another benefit of the reforms is the removal of all super fund exit fees, across the board. With the Australian Prudential Regulation Authority (APRA) estimating super members lost approximately $52 million in exit fees in 2016/17, this is a great win for Australian super account holders. 


Take action and revive your super today

Here’s what you can do right now to build a stronger super account in light of these reforms.

Visit Insurance Online

Revise your insurance cover online or use our needs calculator to ensure existing cover continues to meet your needs.

Visit Member Online

  • Keep your account active by making a personal or employer contribution.
  • Combine your other super accounts into VISSF using the online consolidation tool.
  • Keep your account current by updating beneficiary details.
  • View and adjust your investment choices if required.

Complete a Declaration Form

If you have an inactive low-balance account and would like us to advise the ATO that your account is active, complete and send us a copy of the Declaration Form which can be found at www.vissf.com. au/forms-you-need

1 Industry Super Funds, Federal Budget 2018 (2018). Available at: https://www.industrysuper.com/media/federal-budget-2018/

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