Australia's new “Protecting Your Superannuation” law, effective 1 Jul 2019, will present implementation challenges for pension funds, which must send notices to members in April and/or May 2019.
Highlights of the changes include the following:
─ Have a balance of less than AUD $6,000
─ Aren’t related to a defined benefit interest
─ Don’t have insurance
─ Haven’t received a contribution in the previous 16 months
─ Don’t meet a condition of release specified in regulations that are yet to be published
─ Haven’t experienced (after the amendments) any of the following extra activity tests in the previous 16 months:
− A change in the member’s choice of fund investment options
− Changes to the member’s choice of insurance coverage under the fund
− Nomination or amendment of a binding beneficiary
− Written member notification to the ATO that the member wasn’t a member of an inactive low balance account
− An amount due to the fund for a member, for example, superannuation guarantee contributions
The ATO will be given powers to reunite ATO-held accounts with an active account in the member’s name if the consolidated balance would amount to AUD $6,000 or more. Also, the amendment requires the ATO to transfer any balance to an eligible active account within 28 days of identifying the account.