Treasury Laws Amendment (Protecting Your Superannuation Package) Regulations 2019 (F2019L00539)

Schedule 1   Amendments

Part 1   Amendments

Corporations Regulations 2001

1   After Subdivision 5.8 of Division 5 of Part 7.9

Insert:

Subdivision 5.8A - Information in relation to inactive superannuation accounts

7.9.44A Meaning of inactive

In this Subdivision, a member of a regulated superannuation fund has an account that is inactive in relation to a choice product or a MySuper product for a period if the member has an account that is inactive in relation to the product for the period within the meaning of subsection 68AAA(3) of the SIS Act.

7.9.44B Notices about insurance - inactivity

(1) This regulation is made for the purposes of paragraph 1017DA(1)(a) of the Act.

Application

(2) This regulation applies if:

(a) a member of a regulated superannuation fund holds a choice product or a MySuper product offered by the fund; and

(b) the fund provides a benefit to, or in respect of, the memberunder the product by taking out or maintaining insurance; and

(c) the member has not made an election, under subsection 68AAA(2) of the SIS Act, that the benefit will be provided to, or in respect of, the member under the product by taking out or maintaining insurance even if the member's account is inactive in relation to the product for a continuous period of 16 months; and

(d) if under the governing rules of the fund the benefit will not be provided to, or in respect of, the member under the product by taking out or maintaining insurance if the member's account is inactive for a period of less than 16 months - the member has not made an election under the governing rules of the fund that the benefit will be provided in that way even if the member's account is inactive in relation to the product for that lesser period.

(3) However, this regulation does not apply in relation to:

(a) a defined benefit member; or

(b) an ADF Super member (within the meaning of the Australian Defence Force Superannuation Act 2015); or

(c) a person who would be an ADF Super member apart from the fact that the regulated superannuation fund is or was, for the purposes of Part 3A of the Superannuation Guarantee (Administration) Act 1992, a chosen fund for contributions for the person's superannuation by the Commonwealth; or

(d) a member to whom the employer-sponsor contribution exception applies under section 68AAE of the SIS Act.

Insurance inactivity notices

(4) Each trustee of the regulated superannuation fund must ensure that the member is given an insurance inactivity notice in relation to the benefit for each occasion on which one of the following paragraphs is satisfied:

(a) the member's account has been continuously inactive in relation to the product under which the benefit is provided for a period and, were the member's account to continue to be inactive in relation to the product for a further period of 7 months, the fund would cease to provide the benefit by taking out or maintaining insurance either under the governing rules of the fund or because of the application of section 68AAA of the SIS Act;

(b) the member's account has been continuously inactive in relation to the product under which the benefit is provided for a period and, were the member's account to continue to be inactive in relation to the product for a further period of 4 months, the fund would cease to provide the benefit by taking out or maintaining insurance either under the governing rules of the fund or because of the application of section 68AAA of the SIS Act;

(c) the member's account has been continuously inactive in relation to the product under which the benefit is provided for a period and, were the member's account to continue to be inactive in relation to the product for a further period of 1 month, the fund would cease to provide the benefit by taking out or maintaining insurance either under the governing rules of the fund or because of the application of section 68AAA of the SIS Act.

(5) For the purposes of subregulation (4), an insurance inactivity notice in relation to the benefit is a notice in writing given to the member:

(a) stating the length of the continuous period for which the member's account has been inactive in relation to the product under which the benefit is provided; and

(b) explaining that the member's account will be active in relation to the product if an amount, such as a contribution, is paid into the account; and

(c) stating the date on which, if there is no activity, the benefit will cease to be provided; and

(d) stating:

(i) the amount of insurance fee charged in relation to the product for the fund's most recent completed year of income; and

(ii) the amount of insurance fee likely to be charged in relation to the product for the fund's current year of income; and

(e) explaining whether the benefit will cease to be provided:

(i) under the governing rules of the fund; or

(ii) because of the application of section 68AAA of the SIS Act; and

(f) setting out:

(i) whether or not it is possible for the member to elect to continue to be provided the benefit; and

(ii) if it is possible for the member to do so - the method by which the member can make the election.

Time for giving notice

(6) If a trustee of a regulated superannuation fund is required under subregulation (4) to ensure that a member of the fund is given a notice in relation to a benefit provided to the member under a product offered by the fund, the notice must be given:

(a) if paragraph (4)(a) is satisfied - within the period of 2 weeks after the day on which that paragraph is satisfied; and

(b) if paragraph (4)(b) is satisfied - within the period of 2 weeks after the day on which that paragraph is satisfied; and

(c) if paragraph (4)(c) is satisfied - within the period of 2 weeks after the day on which that paragraph is satisfied.

7.9.44C Notices about insurance - right to cease insurance cover

(1) This regulation is made for the purposes of paragraph 1017DA(1)(a) of the Act.

Application

(2) This regulation applies if:

(a) a member of a regulated superannuation fund holds a choice product or a MySuper product offered by the fund; and

(b) the fund provides a benefit to, or in respect of, the memberunder the product by taking out or maintaining insurance; and

(c) either:

(i) the member has made an election, under subsection 68AAA(2) of the SIS Act, that the benefit will be provided to, or in respect of, the member under the product by taking out or maintaining insurance even if the member's account is inactive in relation to the product for a continuous period of 16 months; or

(ii) if under the governing rules of the fund the benefit will not be provided to, or in respect of, the member under the product by taking out or maintaining insurance if the member's account is inactive for a period of less than 16 months - the member has made an election under the governing rules of the fund that the benefit will be provided in that way even if the member's account is inactive in relation to the product for that lesser period.

(3) However, this regulation does not apply in relation to:

(a) a defined benefit member; or

(b) an ADF Super member (within the meaning of the Australian Defence Force Superannuation Act 2015); or

(c) a person who would be an ADF Super member apart from the fact that the regulated superannuation fund is or was, for the purposes of Part 3A of the Superannuation Guarantee (Administration) Act 1992, a chosen fund for contributions for the person's superannuation by the Commonwealth; or

(d) a member to whom the employer-sponsor contribution exception applies under section 68AAE of the SIS Act.

(4) Each trustee of the regulated superannuation fund must ensure that the member is given a notice about rights to cease insurance in relation to the benefit:

(a) within 2 weeks after the day on which the member makes the election mentioned in subparagraph (2)(c)(i) or (ii) in relation to the benefit; and

(b) after the first notice about rights to cease insurance in relation to the benefit is given, at regular intervals of no more than 15 months.

(5) For the purposes of subregulation (4), a notice about rights to cease insurance in relation to a benefit is a notice in writing given to the member:

(a) explaining that the member has elected for the benefit to continue to be provided:

(i) under the governing rules of the fund; or

(ii) because of the application of section 68AAA of the SIS Act; and

(b) stating the date on which, and the manner in which, the member made that election; and

(c) explaining what the member needs to do if the member wishes to cease to obtain the benefit.