You may have an SMSF with a secondary APRA-regulated fund for your insurance because it enables you to access policies with better benefits or lower premiums. If so, then on 1 July 2019 your insurance cover may be changing.
New legislation introduced
In February this year, the Government passed legislation which prevents trustees of APRA-regulated funds from providing insurance to members with inactive superannuation accounts, unless a member has directed otherwise.
APRA-regulated funds were given until April this year to inform inactive members that their insurance would be switched off unless they elected to retain it. However, if you missed this correspondence, your insurance could be cancelled unknowingly. Being uninsured could have a devastating future impact and it may be extremely difficult or costly to access insurance at a later stage of life.
Is your fund considered inactive?
Your APRA-regulated fund will be considered inactive if it has not received a contribution or a rollover for a continuous period of 16 months. If your APRA-regulated fund is considered inactive at 1 July 2019, your insurance cover may be terminated under the new legislation.
What you need to do
If you wish to maintain your insurance cover, please take one of these steps as soon as possible:
- Notify your APRA-regulated fund that you wish to ‘opt-in’ and maintain your insurance cover
- Make a contribution or rollover to your ‘inactive’ APRA-regulated fund so that the period for which your fund starts to be inactive is reset. We recommend that you also ‘opt-in’.
How can we help?
If you are concerned you are going to be affected by these changes or need assistance with your insurance, please call Thomas Heenan or Greg Newbury on 02 8226 1655 so that we can discuss your situation in more detail.