Following a recommendation made by Kenneth Hayne as part of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the Government have created new legislation to assist in consolidating up to 5,000,000 ‘in-active’ superannuation accounts. This legislation has been passed and begins on the 1st of July 2019.

The legislation is designed to consolidate superannuation funds for members where there has been no activity (i.e. no contributions made within the last 12 months). If you’ve had multiple jobs throughout your working life and as a result have multiple super funds, the government are going to help you consolidate.

For example, if you worked for Coles or Bunnings in your earlier years and now work for the state government, the ATO are going to help you consolidate your REST Super account into QSuper.

Billions are lost from member’s accounts each and every year and this is the motivation to consolidate ‘in-active’ super funds.

This sounds like a great idea, what could possibly be wrong with this?

The idea is fantastic and any situation where a member can save on fees should be explored. Where the issue lies, is that many superannuation funds have default Life, TPD and Income Protection cover within the fund.

The insurance products offered by super funds vary greatly.  For example, Hesta’s default income protection policy pays out as little as $850/month and REST’s income protection pays out as much as $3,000/month.

You might find yourself with as little as $50,000 of Total and Permanent Disability (TPD) insurance. I’m not sure how anyone could reskill for a new job, make changes to their home for wheelchair accessibility or buy a van for wheelchair assistance for as little as $50,000 if that were to tragically happen to you or a family member.

The government consolidating your super for you could leave you dangerously exposed if you were to become sick or injured and are unable to work.


What you can you do?

  1. Opt in – As part of the new legislation you have the option to ‘opt in’ i.e. maintain your cover with the super provider. Super funds are sending out documentation regarding this, make sure you respond to the ‘opt-in’ form sent out to you by your super fund.
  2. Make time to have a financial adviser review this with you, you don’t have long before this change happens and purchasing a new policy after this legislation is active could be more costly than to maintain the cover you have at present.


If you’d like an appointment to discuss this together, call FAA Group on 5451 0022. We look after 14,000 people across Australia and we’re ready to help you reach your goals and stay protected in doing so.