The Australian Government has introduced 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.
If an account balance is considered ‘inactive’ and is also below $6,000, then the following will take place:
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 and your account balance is over $6,000, you can:
We must receive your written consent to avoid cancelling your cover against your wishes.
If you wish to keep your insurance cover and your account balance is below $6,000, you can:
1. Reactivate your account by:
2. Write to the ATO (not LGS) with attention to the Commissioner of Taxation, informing them that your account is active.
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 high fees.
If you have any questions or would like to make an appointment with a financial planner, please call us on 1300 LGSUPER (1300 547 873) between 8.30am and 5.00pm, Monday to Friday.