Insurance in super reforms27 Nov 2019
The Federal Government has introduced legislation that will affect some members insurance arrangements. These new reforms, known as Putting Members Interests First and Protecting Your Super, are designed to ensure members' superannuation balances are not unnecessarily eroded by insurance premiums.
For many Australians, the death, total and permanent disablement, and income protection cover they have through their super is the only insurance cover they have. While the government is hoping this initiative will stop people paying for multiple insurance premiums, it’s important that people check they are not losing vital cover they need.
What are the benefits of insurance within super?
- Insurance through super is often more cost effective than cover outside your super due to group buying power.
- For eligible claims, insurance provides you and your loved ones with a selected amount of back-up income should you become ill, injured or die.
- Premiums are deducted from your super account balance leaving you with no loss of income
- Flexible options are available which can be tailored to suit your needs and you can change your level of cover at anytime
- If your insurance is cancelled, you may not be able to reinstate your cover without going through medical underwriting.
Putting Members Interests First (PMIF)
Under the PMIF reforms, from 1 April 2020 superannuation funds can only provide insurance on an "opt-in" basis to members in the following circumstances:
- Your superannuation balance has not been $6,000 or more on or after 1 November 2019
- You’re aged under 25*
This means, new members will not automatically receive insurance if one or both of the above circumstances apply and if you’re an existing member, unless you elect to keep your insurance, it will be cancelled if your balance is under $6,000.
We’re currently writing to affected members to advise them of their options. If this is you and you’d like to keep your insurance, please either refer to the instructions in the letter we sent you to opt in online, complete the Election to keep insurance cover form ** or arrange for sufficient contributions to be paid into your account to ensure your balance is over $6,000.
You have until 1 April 2020 to elect to keep your insurance by any of these means.
Protecting Your Super (PYS)
From 1 July 2019, insurance cover is no longer provided to members with inactive accounts, unless they elect to keep it. This initiative forms part of the broader PYS reforms .
For this purpose, inactive is defined as an account (regardless of balance) that hasn’t received a contribution – including employer contributions, personal contributions, transfers from another super fund or the ATO, or the government co-contribution – for a continuous period of 16 months.
Affected members are now contacted regularly – at nine, 12 and 15 months of inactivity – to warn them that they will lose their insurance cover if their account reaches 16 months without a contribution and offer them the opportunity to keep their insurance.
If your insurance is cancelled as part of PYS, you will have the option to reinstate your cover providing certain circumstances are met. Alternatively, to ensure you don’t fall into this category, you can elect to keep your insurance cover at any time by completing the Election to keep insurance cover form **.
More information on cancelling of insurance under PYS reforms is available in our Insurance Guide .
Need to know more about your insurance cover?
- Log in to your account to view details of your insurance cover with us.
- Call our Super Helpline on 1800 640 886 or if living overseas# please call +61 3 8687 1854, or
Forgotten your PIN or don’t have one? You can reset it online or contact or Super Helpline on 1800 640 886 for assistance.
* Based on knowledge of our membership, Media Super already implemented this change effective 1 July 2018. Any new members under 25 who have joined since then have not received default cover. Young members can apply for insurance cover any time before their 25th birthday, otherwise they will automatically receive default cover when they turn 25.
** By completing this form you are electing to keep your insurance if you fall into PMIF or PYS categories.
# Insurance cover for members living overseas ceases after 5 years. Please see the Insurance Guide for further information.