Australians are being urged to check the status of their superannuation fund ahead of a major change that’s coming on July 1 that could leave them without life insurance.
A new public awareness campaign has revealed from the first day of the new financial year inactive super accounts will have default life insurance switched off.
The change is being introduced to prevent those with multiple accounts from losing money through paying fees on low account balances and life insurance cover.
While many will be unaffected by the change because they opt for default funds with each new employer, others will be left without life insurance, the campaign states.
The ‘When did you last check your super?’ campaign video states the usual methods of reminding people to check their super have previously gone unnoticed.
In the video, Australians are reminded about the July 1 deadline and encouraged to check whether their insurance through superannuation will be impacted as a result.
According to research by the Association of Superannuation Funds of Australia (ASFA), more than 50 per cent of Aussies aren’t unaware of the July 1 deadline.
What’s more, one in four people aren’t aware they have life insurance attached to their super, which is why the authority developed the public awareness campaign.
ASFA chief executive Martin Fahy told news.com.au the change is being introduced for a very good reason – but the July 1 activation date has left funds with little time to warm people.
‘The time frame for implementation has meant it has been challenging for superannuation funds to engage their members to ensure they understand the consequences of the changes in just a few short months,’ Mr Fahy said.
The change could also mean those who have been out of the workforce for a while – such as parents on maternity leave – may lose life cover from a fund being closed.
The ASFA data showed while more than 85 per cent of Australians have life insurance included in their super funds, only 67 per cent are aware of it.
‘We already know Australians are not highly engaged with their superannuation, from the balance to the insurance products they hold,’ Dr Fahy said.
‘This study demonstrates that the problem only becomes more acute when looking at those Australians most likely to be impacted by the changes.’
Dr Fahy said the changes will help to reduce additional fees and insurance that come along with unintended duplicate accounts – but it requires people to take action.
He said to see if you will be affected by the changes, visit timetocheck.com.au or simply open any unopened letters or text messages from your super fund.