Putting Members’ Interests First (PMIF) and Protecting Your Super (PYS)

Traditionally there has been much apathy surrounding members’ understanding of super, and even more when it comes to life insurance, total and permanent disability and income protection insurance provided through super. However, new legislation has been passed that has the objective of protecting members’ super balances from costs related to unwanted insurance cover. So this article is a heads up.


This legislation has passed both houses and the commencement date is 1 April 2020. The key provisions of the reform are that the trustee cannot provide “opt-out” insurance for any member if:

  • the member is under the age of 25 and begins to hold the product on or after 1 April 2020, or
  • the balance of the product is less than $6000 and has not been $6000 or more on or after 1 November 2019.

Funds are required to write to members by 1 December 2019 to advise them that their insurance will be cancelled on 1 April 2020 if they have not taken the active choice of opting-in to their insurance cover.

Funds must also notify new members who have joined between 2 November, 2019, and 1 April 2020, that their insurance will be cancelled if their balance remained below $6000 throughout the period and they have not opted in.

Default cover can only be be provided to new members joining from 1 April 2020, after:

  • the balance has reached $6000
  • the member has reached age 25, and
  • the member has opted-in to cover beforehand or is in an occupation identified by their trustee as ‘dangerous’.


This legislation came into effect on 1 July 2019 and essentially provided for the transfer of low balance inactive accounts to the ATO, some change to fees and cancelling insurance for inactive members. An ‘inactive account’ is generally defined to be an account for which no contribution or roll-over has been made for the past 16 months, subject to some exemptions for certain ‘positive acts’.

To do list

  • read your super communications carefully. If you’re not paying attention, you could lose your insurance cover, and
  • members who have already acted to maintain their insurance cover under PYS will have to act again by opting-in under PMIF legislation if their balance is less than $6000.

Superannuation funds will soon be writing to members under both the PYS and the PMIF legislation advising them what they need to do to maintain their default insurance cover. Where the communication relates only to PMIF legislation, this will generally mean asking members to opt-in.

Personally I find a certain irony in the titles to both pieces of legislation: NGS Super has always protected members’ super and has always put members’ interest first! And I have seen thousands of NGS Super members and their dependants benefit from the automatic provision of insurance in times of death, illness or injury.

And to close off the year . . . according to a survey conducted by the Governance Institute of Australia, the 2019 Ethics Index, industry super funds have reclaimed their title as Australia’s most ethical financial institutions.

On behalf of the Trustee, the Fund’s Management and staff, we would like to wish you a happy and safe holiday season! Our best wishes to you!

(Important information: The information in this article is general information only and does not take into account your objectives, financial situation or needs. Before making a financial decision, please assess the appropriateness of the information to your individual circumstances, read the Product Disclosure Statement for any product you may be thinking of acquiring and consider seeking personal advice. Past performance is not a reliable indicator of future performance. Any opinions are those of the author and do not necessarily reflect the view of NGS Super.)
Bernard O’Connor
NGS Super Company Secretary/Manager Insurance and Complaints