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Protecting Your Super legislation

The Australian Government has introduced new legislation, the ‘Protecting Your Super’ package, which may impact the insurance and fees for your LGS account.

What are the insurance changes?

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:

  • We will be required to close your LGS account
  • Your funds will then be transferred to the Australian Taxation Office (ATO)
  • You will lose your insurance cover in your super account

The legislation seeks to protect inactive superannuation accounts from being eroded by insurance premiums for unwanted or unneeded cover.

How do I stop my insurance from being cancelled? 

If you wish to keep your insurance cover and your account balance is over $6,000, you can:

  • Make a contribution of any amount into your account, either through your employer, direct debit or BPAY (details within the ‘Payment options’ tab in Member Online once you log in)
  • Tell us in writing that you wish to continue receiving insurance in your LGS account. You can complete this form and either take a photo with your smartphone and email it to us at admin@lgsuper.com.au or scan and email or mail it to us at:

    Local Government Super
    PO Box N835
    Grosvenor Place NSW 1220

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:

  • Making a contribution of any amount into your account, either through your employer, direct debit or BPAY (details within the ‘Payment options’ tab on Member Online once you log in)
  • Making or changing a binding nomination
  • Changing your investment option (you can do this on Member Online or by calling Member Services) OR

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.

What are the fee changes?

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.

Need more information?

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.