The government has introduced legislation designed to prevent excessive superannuation fees, exit fees and insurance arrangements.
Minister for Revenue and Financial Services Kelly O’Dwyer has tabled in parliament a number of superannuation measures first announced in the 2018 federal budget.
The Treasury Laws Amendment (Protecting Your Superannuation Savings Package) Bill 2018 will stop super funds from charging administration and investment fees of more than 3 per cent a year for accounts with balances lower than $6,000.
The bill also aims to remove exit fees for members wanting to close or rollover their super accounts.
“These changes will help to prevent erosion of low balance accounts by high passively-incurred fees, and will remove a disincentive to superannuation fund members consolidating and closing unwanted accounts,” the statement said.
The bill will also make insurance an opt-in decision for superfund members under 25 years old, members with account balances lower than $6,000 and members with inactive accounts.
“This will better target default insurance cover and prevent inappropriate erosion of retirement savings by insurance premiums for cover members do not know they have, that goes beyond what they need, or which they cannot even claim on.”
The introduced bill also contains measures that see inactive accounts with less than $6,000 transferred to the Commissioner of Taxation, which will then be “empowered” to pay back these lost funds to the owner’s active account.
“This will increase the rate of account consolidation across the superannuation industry, reduce the number of inactive low‑balance accounts at risk of erosion and reduce insurance premium and fee duplication for many members,” the statement said.
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