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Written by Henry Brennan:

Parliament has introduced new laws designed to protect Australia members’ superannuation savings from erosion. The reform aims to achieve this by limiting administration and exit fees within retail funds, ensuring members are not unknowingly paying for insurance coverage as well as consolidating small, inactive balances accrued across multiple superannuation accounts. While SMSFs are not directly impacted by the changes, it may affect SMSF members that have not consolidated their total superannuation into a SMSF and have kept a small balance in a retail fund to maintain an insurance policy.


The changes affect “inactive low-balance super accounts”, which is defined as a:

  • Retail Super Fund;
  • With an Account Balance of $6,000 or less; and
  • No contributions have been made for a period of 16 continuous months or more


As a result of the recent reform, members with inactive low-balance super accounts may have their funds automatically transferred to the Australian Taxation Office for the purposes of swift consolidation with their active accounts.

Retail funds are currently in the process of contacting members with inactive accounts to request an election to continue insurance coverage or make a contribution to reactivate the account. Members who wish to maintain their insurance cover should ensure they take action before 30 June 2019.

About the author

Jo Scrima

Director - Superannuation Services

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