Protecting Your Super

The Federal Government’s ‘Protecting Your Super’ package comes 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.

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

Changes to insurance

Accounts with no contributions or rollovers for a continuous period of 16 months, will lose insurance cover unless you opt-in to keep your cover.

From 1 July 2019, your insurance will be cancelled if your account has not received a contribution or rollover for a period of 16 continuous months. If your account is at risk of losing insurance cover, you will already have received a communication from us advising that this is the case and what you need to do if you would like to retain your cover.

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 for you to keep your cover if you wish.

Insurance cover is a valuable inclusion in your super, designed to protect you and your family when you need it most. It is important to note however, 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. If you would like information about insurance in super, please visit ASIC’s MoneySmart website or seek financial advice.

If you wish to maintain your insurance cover, you can do any of the following before your account has been inactive for a continuous 16-month period:

• Login to your secure MemberOnline account and elect to keep your insurance cover OR
• Complete and return an Election to Maintain Insurance Form OR
• Contribute to your account, or rollover funds from another super fund into your Prime Super account. 

Changes to fees

There will be a 3% cap on administration and investment fees on accounts with balances below $6,000.

From 1 July 2019, Prime Super will not charge administration fees to members with balances below $6,000. This is a great example of meeting the government’s aim to protect Australians’ super savings from unnecessary erosion by fees.

As at 30 June 2018, all investment options had investment fees of less than 3%. However, to ensure that this requirement is managed into the future, from 1 July 2019 members will only be able to invest or remain in the Property and Alternatives investment options if they have an account balance greater than $10,000.

Question: I have less than $10k and am invested in Property and/or Alternatives. What does this mean for me?

If you have less than $10,000 and are invested (either wholly or partially) in Property or Alternatives on 1 July 2019, your investment will be automatically moved to the MySuper investment option.

If you are affected by this change and would prefer to have your money moved to a different investment option or mix of options, please contact us to facilitate this.

If you wish to change your investment strategy ahead of these changes, you may do so through your MemberOnline account or by completing an Investment Choice Form.

Exit fees, including fees for part withdrawals, will be banned.

Prime Super removed exit fees on 1 July 2013 so there will be no change to the fees charged as a result of this measure.

Inactive super accounts

Inactive accounts with balances below $6,000 will be transferred to the ATO.

If your account has been continuously inactive for 16 months, you have a balance less than $6,000 and have not opted-in to receive insurance benefits, it will be transferred to the ATO.

The following events will prevent your account being transferred to the ATO for 16 months:

• Making regular contributions to your Prime Super superannuation account either through your employer or through voluntary contributions;
• Making a change to your investment strategy;
• Making certain changes to your insurance coverage;
• Making or amending a beneficiary nomination; or
• 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.

If you have chosen to keep an amount of money with Prime Super for insurance purposes, you will need to complete an Election to Maintain Insurance Cover form and send it back to us.

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.

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.

Making contributions to your super

Work Test exemption

If you are aged 65 to 74 years and want to contribute to your super, there are rules you must satisfy. Known as the Work Test, the current rules are:

• If you’re 65 years or older, we can accept super guarantee payments from your employer.
• From 65 until you turn 75, we can only accept voluntary contributions from you or salary sacrifice contributions from your employer if you have been employed for at least 40 hours over 30 consecutive calendar days during the relevant financial year or meet a Work Test exemption.

In order to prove that you meet the Work Test requirements, you are required to complete a Work Test declaration for each financial year that you wish to contribute. We will contact you if we think you may be affected by this requirement.

A new exemption has been introduced from 1 July 2019 that will mean you do not need to complete the Work Test declaration if you meet all of the following criteria:

• Are aged 65 to 74 years;
• Have met the Work Test in the previous financial year;
• Have a total superannuation balance of less than $300,000 at the end of the previous financial year; and
• Have not previously relied upon the Work Test exemption to make contributions.