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Protecting your Super.

The Federal Government’s “Protecting Your Super Package” legislation came into effect on 1 July 2019. These changes were implemented to protect members’ Superannuation account balances from unnecessary erosion by fees and ensuring arrangements for insurance in super are appropriate and members are not paying for insurance that they do not know about, or inappropriately erode their retirement savings.  

What are the changes? Click on a topic below to find out more.

From 1 July 2019, insurance cover on all super accounts deemed to be ‘inactive’ will be cancelled, regardless of the value of a member’s account balance, unless members elect to maintain their insurance.

For insurance purposes, your account is considered inactive if we have not received a contribution or rollover into your account over a 16 consecutive month period. If your account has not received a contribution or rollover over a 9, 12 or 15 consecutive month period, Hostplus will communicate with you to notify you of your options to maintain your insurance cover, should you wish to do so.

We recommend that you carefully consider whether your insurance cover is appropriate before making any decision in respect of your cover.

Please note, if your insurance is cancelled, you will retain your super account and continue to be a Hostplus member.

Inactive low-balance accounts will be transferred to the ATO in April or October of each year. Your Hostplus account balance will be considered to be an inactive low-balance account if:

  • no amount has been received for crediting to that account for your benefit within the last 16 months; and
  • it has a balance of less than $6,000;
  • it has no insurance attached to it; and
  • you have not met a prescribed condition of release.

Your Hostplus account balance will not be an inactive low-balance account if any of the following have occurred in relation to you in the last 16 months:

  • an amount has been credited to the account;
  • you have changed your investment options;
  • you have made changes to your insurance coverage;
  • you have made or amended a binding death benefit nomination;
  • you have made a written declaration to the ATO that your account balance should not be treated as being an inactive low-balance account; or
  • there was an amount owed to us in respect of you (but this excludes outstanding employer superannuation contributions).

If your account is transferred to the ATO, and you are aged under 65, it will search for other ‘eligible active accounts’ held by you. If a match is found, the ATO will automatically transfer the balance into the eligible active account unless you have requested a transfer to your preferred superannuation account. If the ATO can’t find an active account, it will hold the balance at no cost to you, and interest will be accrued based on the Consumer Price Index (CPI).

An eligible active account is a super account that:

  • is held by a person who has not died;
  • is in the accumulation (growth) phase;
  • accepts government rollovers;
  • has received a contribution in the previous or current financial year; and
  • will have a balance over $6,000 after the rollover is complete.

Please note if your account is transferred to the ATO you will no longer be a member of Hostplus.

For further information about keeping your account at Hostplus if it is an inactive low balance account please see the Frequently Asked Questions about My account being transferred to the ATO below.

Members with an account balance of less than $6,000, as at the end of 30 June each year, will have the total combined amount of administration and investment fees and certain investment costs capped at a maximum of 3% of their account balance. Any amount charged in excess of that cap will be refunded.

Why do I have insurance?

The law requires that default death and permanent disability insurance is provided to new members invested in a MySuper product, unless the member opts-out. Both the Hostplus PDS and information contained in your welcome pack provides details of this insurance cover.

Why did I receive a notice telling me my insurance may be cancelled?

We contacted you because your account has been deemed inactive or is likely to become inactive, because we have not received any contributions or rollovers over the past 9, 12 or 15 months.

If the notice is from another fund, contact that fund directly for more information.

Why did I NOT receive a notice from Hostplus?

Hostplus has contacted all members via post or email to advise of the “Protecting Your Super Package” legislation. If you have not received this information you may need to update your contact details.

To update your details, login to your Member Online account. If you are concerned your account may become inactive and your insurance may be immediately cancelled, you can contact Hostplus on 1300 467 875.

How do I keep my insurance?

If you decide that you wish to maintain your insurance cover, go to our Opt-In page and submit your details. Your election to maintain cover will continue meaning that your insurance cover will continue (provided that your account balance is sufficient to continue to pay premiums) and your election will only cease if you revoke the election. We will contact you within 2 weeks of you making the election as well as at regular intervals of no more than 15 months to remind you that you have made an election.

If you do not make an election, your insurance cover will be cancelled once your account has been inactive for 16 months. However, if you do any of the following before your account becomes inactive, your insurance cover will continue (provided that your account balance is sufficient to continue to pay premiums):

  • rolling into Hostplus any money that you may have in other super fund accounts
  • making a Voluntary Contribution. Go to your Member Online account for payment details for BPAY, cheque or Electronic Funds Transfer
  • instructing your employer to pay your Superannuation Guarantee contributions into your Hostplus account.

But please note that if your account becomes inactive for 16 months after making any of the above contributions or roll overs, your insurance cover will be cancelled, unless an election has been made.

If I elect to keep my insurance, can I change my mind?

Yes, you can change your mind at any time by writing to us to let us know you wish to revoke your election. You can also decrease or cancel your insurance at any time by logging onto your member online account or by contacting us.

Will I have to make another election if my account becomes inactive?

No, your election is permanent unless you choose to revoke it. However, your insurance will be cancelled if there are insufficient funds in your account balance to pay premiums. We will also contact you within 2 weeks of you making the election as well as at regular intervals of no more than 15 months to remind you that you have made an election.

What happens if my insurance is cancelled because of no contributions or roll overs into Hostplus over a 16 consecutive month period?

If your insurance is cancelled due to 16 consecutive months of inactivity, we will contact you to let you know that your cover has been cancelled, and you will no longer be covered in the event of your death, illness or disablement. You will not be able to make a claim for insurance benefits for events or conditions that arise after your cover has been cancelled. You will no longer be charged insurance premiums.

If you wish to have insurance through Hostplus again in the future, you can choose to apply for cover, however before applying you must either make a contribution or rollover to reactivate your account or you must elect to maintain your insurance, as legislation otherwise prohibits us from offering you insurance benefits while your account continues to be inactive. This application may be subject to a full health assessment. Your application will be forwarded to our Insurer for assessment and our Insurer will decide whether or not to provide you with cover. If you decide that you wish to apply for cover and/or to make an election to maintain your insurance regardless of inactivity, go to our Opt-In page and submit your details.

If a rollover or contribution is received into your account within 30 days of your insurance ceasing, then your cover may be reinstated at your previous level but as restricted cover. This means that you will not be covered for any pre-existing illness or injury. Once you have been at work for 30 consecutive days, this restriction will be removed, and your cover will be the same as the cover you held at the time it ceased. If a contribution is received after 30 days, your cover may recommence at our default insurance levels, depending on the type and date of the contribution. For further information about insurance reinstatement and recommencement including restricted cover please see the “If your cover starts again” section of our PDS.

Please note, if your insurance is reinstated there is no gap in cover so premiums will continued to be paid throughout this 30 day period.

We encourage you to review your current insurance arrangements to see if they are right for you.

You can review, change or cancel your Hostplus insurance via Member Online.

Will you tell me before you cease my insurance?

Yes, we will let you know via letter before your insurance is cancelled. We will write to you if your account has been or becomes inactive for 9, 12 or 15 consecutive months. You can also keep up to date with your transactions through our Member Online facility.

When will my insurance cease if I don’t make a payment into my account?

Your insurance cover will be cancelled 16 months after the last contribution or rollover was received, unless an election to maintain insurance has been made.

What if my employer is in arrears with my SG payments?

The legislation states that a member’s account becomes inactive if the trustee has not received a contribution or rollover into the account over a 16 consecutive month period – this period commences from the date the fund last received a contribution or roll over. The date of receipt by the fund is what is important – therefore if an employer fails to make a superannuation contribution and this results in your account balance becoming inactive, your insurance will be cancelled even if the employer makes a late payment to cover that failure.

You should follow up with your employer if you believe that it has not been paying your Superannuation Guarantee contributions correctly.

I’m an Executive member and my employer pays for my insurance. Does this apply to me?

Your Hostplus Executive membership will not be affected by this change so long as contributions continue to be made to your account that covers both your superannuation guarantee contributions and the premiums.

I’ve just realised I have insurance policies through Hostplus as well as another fund/s – what should I do?

We encourage you to review your current insurance arrangements to see if they are right for you.

You can review or change your Hostplus insurance via Member Online.

It may also be time to look at consolidating your accounts. Consolidation will save you from paying extra fees and help you to grow your nest egg.

Before consolidating, you should consider whether it is the right financial decision for you, including what impact it will have on your insurance cover or any other benefits, including overall returns. Please note that consolidating into Hostplus will mean you will be unable to transfer insurance cover or claim a tax deduction for contributions made to your other funds as those accounts will be closed. You must consider if this applies to you and do so prior to consolidating.

If you have any questions, please speak with a financial planner.

How do I make sure my account is not sent to the ATO as an inactive low-balance account?

To ensure that your account is not transferred to the ATO as an inactive low-balance account, you will need to take at least one of the following actions every 16 months:

  • make a contribution or rollover to your account;
  • make a change to your investment options;
  • make a change to your insurance coverage;
  • make a binding death benefit nomination; or
  • make a written declaration to the ATO that your account balance should not be treated as being an inactive low-balance account.

If your account balance reaches $6,000 or more it will not be an inactive low-balance account.

 

Frequently asked questions