The countdown to the introduction of the Protecting Your Super (PYS) legislation is now well underway, with the changes set to come into effect at the beginning of next month. From 1 July, super accounts that haven’t received contributions for a continuous period of 16 months will have their insurance cancelled, and inactive accounts with balances below $6,000 will be rolled over to the Australian Taxation Office for consolidation.
While the introduction of these much-publicised changes may by now feel to many like a long time coming, it’s worth remembering that the amended bill was only passed in February this year. The law gave super funds until 1 April to identify their members with inactive accounts, and until 1 May to advise them of these changes. For super funds, this marked a relatively concentrated timeframe to communicate a message of such importance to so many people. It is important affected members understand what impact these changes will have on them; while some may not need the cover or it may be inappropriately eroding their retirement savings, others could lose valuable protection they may not be able to obtain otherwise.
In an effort to ensure all consumers are informed as to how the PYS legislation will impact them, AIA Australia has launched an extensive campaign aimed at people who may have inactive super accounts, to amplify the messages that all super funds are sending to their impacted members. Run over the four-week period leading up to 1 July, the nation-wide campaign has been a collaboration between AIA Australia and partner super funds. Super funds know their member bases well, so the campaign has been able to focus on those advertising channels that are likely to achieve the most cut-through for their demographics. The ads are being rolled out on billboards, social media, radio and online.
The initiative is just one example of a concerted effort on the part of the industry to improve the level and quality of engagement with its members. Since the introduction of the Insurance in Superannuation Voluntary Code of Practice in July 2018, super funds and their insurance partners have been striving to increase clarity and awareness around insurance products for policyholders.
The Code requires super funds to help their members to make better informed decisions through the provision of easy-to-understand information on an ongoing basis. There will be a focus on promoting digital tools that equip members to monitor their account activity and how much their insurance is costing, so they can understand what they hold and the impact of insurance on their super balance.
AIA Australia is also part of the Insurance in Super Working Group (ISWG) looking at how we can standardise and simplify industry terms and definitions to help consumers better understand their cover. The first stage of this was contained in the ISWG Code requiring super funds to use standard headings for Total and Permanent Disability (TPD) cover. Treasury is currently consulting on the possible scope of further standardisation, as a response to a recommendation of the Royal Commission. The more informed consumers are on insurance, the better they’ll be able to appreciate its value.
You can find more information about the public awareness campaign here www.checkmycover.com.au
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