Recently, there have been reforms for superannuation called SuperStream. What, you may ask, is SuperStream? Well this is the official explanation.
“SuperStream is a package of measures designed to bring the back office of superannuation into the 21st century. Its key components are the increased use of technology, uniform data standards, use of the tax file number as the key identifier and the straight through processing of superannuation transactions.”
There are some very positive outcomes with SuperStream, as it makes it clearer and faster to deal with your super and to keep it organized. Previously, there hadn’t been a specific data format that was required to be captured by the super companies. This resulted in slowed communication between different super companies and with the individual super members. This makes it faster to get information as well as making it faster to consolidate your superannuation accounts.
SuperStream also allows the use of TFNs as the primary locator of member accounts. This is a really useful way of finding all of your superannuation accounts. Previously it was a very time consuming process to find all of your ‘lost’ super accounts and get them consolidated. While there is still some time and effort involved, it can be much less than was previously required. In some cases it can be as simple as signing one form that’s been pre-filled by your super company and they can consolidate a fund for you.
Unfortunately, as with all changes, there can also be some negative impacts. Often times, when a person has multiple superannuation funds, he also has multiple insurance policies within those funds. I have seen a couple of cases now where a superannuation, believing they’re doing the right thing, have sent their members a form which gave authority to roll over any funds they have in other super companies. The member signed the form and returned it in the postage paid envelope. The super company then rolled over/consolidated funds from other super companies, thereby closing those accounts. It also cancelled all their insurance benefits within those funds without notifying the member! In many funds, once an account is closed and the insurance benefits are cancelled, they cannot be simply opened or reinstated without having to undergo medical or financial underwriting which could be problematic if you’ve had medical issues since you originally opened your account.
As somebody who looks after the superannuation accounts and insurance policies of many clients, it’s unthinkable that we would cancel somebody’s policy without replacing it with something equivalent or better, or without having explicit consent. This is an area that seems to have been overlooked with this SuperStream process. I hope that this doesn’t become a widespread problem, but it is something to be aware of. The easiest way to solve this issue is to read and understand what you’re signing. If you can’t make sense of it or don’t know what the ramifications are, then talk to an advisor you can trust.
As always, we’re here to advise you when you need our help. Feel free to contact us if we can be of service to you. Feel free to contact me at firstname.lastname@example.org with any questions you may have.