Designed to protect Australians’ super savings from unnecessary erosion by fees and insurance costs, the Federal Government’s Protecting Your Super Package Act comes into effect on 1 July 2019.

The Protecting Your Super (PYS) package introduces changes to fees and the treatment of inactive low-balance accounts and insurance for inactive members.

Changes to fees include a 3% cap on administration and investment fees on account with balances below $6,000 and a ban on exit fees for part withdrawals. (AustralianSuper removed exit fees on 30 March 2019)

To bring you up to date, here are some answers to frequently asked questions about the package, starting with the changes to super.

PYS and super accounts

What is an ‘inactive’ account?

An account is considered inactive if it hasn’t received a super contribution for over 16 months, has a balance of less than $6,000 and the member hasn’t taken any of the following actions for 16 months:

  • made an investment switch;
  • changed their insurance cover;
  • made or amended a binding beneficiary nomination, or;
  • told us in writing that they are not an inactive low-balance account member

What happens to inactive accounts?

From 1 July if a member’s account has been inactive for 16 months and the balance is less than $6,000, it will be transferred to the ATO.

Why the ATO

The legislation states that inactive accounts must be transferred to the ATO. Within 28 days of receiving transferred money, the ATO will try to transfer it to an active super fund if the individual has one, and where the transfer would take the member’s total balance to $6,000 or more.

Will the money be invested at the ATO?

No, however when lost super is claimed, any interest due will be paid. Interest is based on the consumer price index (CPI). The ATO will not charge any fees on transferred accounts.

What can members do to re-activate accounts?

To ‘re-activate’ an account, members have a few options, including:

  • making a contribution or having their employer contribute to their account
  • changing their insurance
  • making an investment choice
  • nominating a binding beneficiary to their account, or
  • combining super accounts so that their balance is $6,000 or more.

PYS and insurance

Under PYS legislation, super members who haven’t received money (any type of contribution) into their super account for 16 months could lose their insurance cover.

How will members know they are impacted?

We’ve sent a letter to AustralianSuper members who hadn’t received money in their account for 6 months on 1 April 2019. The letter explains the changes and provides members with some options if they want to keep their cover including extending their cover by completing a form enclosed with their letter.

What can members do to keep their cover?

From 1 July 2019, we’ll write to members who haven’t received money for 9, 12 and 15 months.

To keep their cover, members could consider making a contribution to their account (for example once a year), telling employers to contribute to their account or combining super accounts so their balance is $6,000 or more.

For more on PYS visit