Protecting Your Super

What is Protecting Your Super?

The Protecting Your Super (PYS) package of reforms was included in the 2018-19 Federal Budget announcement and came in to effect on 1 July 2019. These reforms aim to reduce the impact of fees and insurance premiums on superannuation account balances so that Australians have more money in retirement.

There are three key elements of the legislation, they are:

1. Capping fees for super accounts with low balances

Most super accounts with balances below $6,000 will have certain fees and costs (generally, administration and investment related fees) capped at no more than 3% of the account balance for that year. Exit fees will no longer apply regardless of the account balance.

2. Life insurance cover ‘opt-in’ on inactive super accounts

A super account will be deemed ‘inactive’ if the fund hasn’t received any contributions into the account over a continuous 16-month period or they haven’t been advised that the member would like to keep their cover (opt-in).

3. Transferring low balance, inactive super accounts to the Australian Taxation Office (ATO)

Super funds will be required to transfer the balance of accounts that have been inactive for 16 continuous months and are below $6,000. This process will happen on a six-monthly basis. The ATO will then attempt to find an active super account for the member where possible.

How the Insurance in Super changes impact your clients

The reforms require super funds to stop providing insurance cover when the superannuation fund:

  • hasn’t received contributions and/or rollovers for over 16 continuous months, and
  • the member has not elected in writing to keep their insurance cover (opt-in).

What's changing for Insurance in Super from 1 July 2019

Term insurance

Product Names

MLC Insurance (Super), Protectionfirst, Life Cover Super, Solitaire, Life Cover 

How are premiums paid

Funded directly – direct debit, cheque, rollover from an external super fund, etc. 

From 1 July 2019

  • As long as your client continues to pay their premium on time, their policy will not be considered ‘inactive’ (i.e. 16 months of no contributions).  
  • Should your client not pay their premium for 16 consecutive months, the insurance cover will lapse before they are considered ‘inactive’ (i.e. 16 months of no contributions). 
  • MLC Life Insurance will send your client a reminder when their premium is due as per our usual process. 

Product Names

MLC Insurance (Wrap or SMSF), Protectionfirst

How are premiums paid

Funded from Navigator account

  • Your client will receive ‘Inactivity Notices’ if contributions are not received into their Navigator account at 9, 12 and 15 months.
  • Your client will be excluded from becoming ‘inactive’ if they make a contribution into their Navigator account, or complete the ‘Keep my Insurance Cover’ form (download the form from
  • If your client’s Navigator account is deemed ‘inactive’ (the super fund has not received a contribution over a continuous 16-month period) MLC Life Insurance will not be able to deduct insurance premiums. The insurance cover will lapse, as per our usual process.
  • If the insurance cover lapses, once the Navigator account is deemed ‘active’ the usual reinstatement requirements apply. 
Traditional Insurance

Product Names

Whole of Life, Endowment

How are premiums paid

Premiums currently payable and no further premiums payable. 

From 1 July 2019

  • No change for your clients
Capital Guaranteed Savings Account

Product Names

MLC Capital Guaranteed Personal Super – ex-Capita, Accumulus 

How are premiums paid

With optional insurance cover attached 

From 1 July 2019

  • No change for your clients 

Frequently asked questions

  • Why your client received a letter?

    The initial mailout was to all clients who had a super account at 1 April 2019, and: 

    • it was opened prior to 9 May 2018 
    • has insurance attached to their super, and 
    • a contribution / premium / rollover has not been received in six months. 

    This mailout was to inform these members of the new PYS legislation and to let them know they may be at risk of losing their insurance cover if they didn’t take action.  

  • Why your client received an 'inactivity' notice?
    Super funds are required to continue to monitor superannuation accounts and to provide an ‘inactivity’ notice to members in cases of 9, 12 and 15 months of inactivity, and to stop providing insurance cover after 16 months of inactivity (unless the member opts-in). 
  • What does your client need to do to keep their insurance in super?

    Your clients can keep their insurance by either: 

    (a) paying a premium / contribution / rollover in at least once every 16 months, or 

    (b) completing a ‘Keep My Insurance Cover’ form (opt-in), download the form from

    Completing a ‘Keep My Insurance Cover’ form will keep their election in place indefinitely until they advise their super fund otherwise. 

  • What if your client's superannuation account becomes inactive?

    If your client’s superannuation account becomes inactive and they want their insurance cover to continue, you (or your client) will need to contact their superannuation fund and let them know.  

    Your client will then be able to make a contribution to their superannuation account or elect in writing to keep their insurance cover (opt-in), download the form from