SUPERANNUATION INDUSTRY (SUPERVISION) ACT 1993

PART 7 - PROVISIONS APPLYING ONLY TO REGULATED SUPERANNUATION FUNDS  

SECTION 68AAA   BENEFITS PROVIDED BY TAKING OUT INSURANCE - INACTIVE ACCOUNTS  

68AAA(1)  
Each trustee of a regulated superannuation fund must ensure that a benefit is not provided by the fund to, or in respect of, a member of the fund under a choice product or MySuper product held by the member by taking out or maintaining insurance if:


(a) the member ' s account is inactive in relation to that product for a continuous period of 16 months; and


(b) the member has not elected under subsection (2) that the benefit will be provided to, or in respect of, the member under the product by taking out or maintaining insurance, even if the member ' s account is inactive in relation to that product for a continuous period of 16 months.

Note:

This section does not apply in relation to regulated superannuation funds with fewer than 5 members (see section 68AAD ).

68AAA(2)  
Each trustee of the regulated superannuation fund must ensure that each member of the fund who holds a choice product or MySuper product offered by the fund may elect, in writing, that a benefit specified in the election is to be provided to, or in respect of, the member under the product by taking out or maintaining insurance, even if the member ' s account is inactive in relation to that product for a continuous period of 16 months.

68AAA(3)  
For the purposes of this section, a member of a regulated superannuation fund has an account that is inactive in relation to a choice product or MySuper product for a period if the trustee, or trustees of the fund, have not received an amount in respect of the member that relates to that product during that period.

68AAA(4)  
The prohibition in subsection (1) ceases to apply to benefits provided to, or in respect of, a member of the fund under a choice product or MySuper product held by the member if the trustee, or trustees of the fund, receive an amount in respect of the member that relates to that product after the account has been inactive in relation to the product for 16 months.

68AAA(5)  
However, the prohibition in subsection (1) applies again if the member ' s account is again inactive in relation to the product for a period of 16 months.

68AAA(6)  
This section does not apply to:


(a) a defined benefit member; or


(b) an ADF Super member (within the meaning of the Australian Defence Force Superannuation Act 2015 ); or


(c) a person who would be an ADF Super member apart from the fact that the regulated superannuation fund is or was, for the purposes of Part 3A of the Superannuation Guarantee (Administration) Act 1992 , a chosen fund for contributions for the person ' s superannuation by the Commonwealth; or


(d) a member to whom the employer-sponsor contribution exception applies (see section 68AAE ).

68AAA(7)  
Nothing in this section affects a right of a member of a regulated superannuation fund if:


(a) the right relates to insurance cover; and


(b) in compliance with this section, an insurance premium in relation to the member for that insurance cover ceases to be paid; and


(c) the right exists because of insurance premiums paid in relation to the member before insurance premiums cease to be paid as mentioned in paragraph (b).

68AAA(8)  
Nothing in this section affects a right of a member of a regulated superannuation fund if:


(a) the right is a right to insurance cover for a fixed term, subject only to the payment of insurance premiums; and


(b) that fixed term begins before the time at which a trustee of the fund is required under subsection (1) to ensure that a benefit is not provided to, or in respect of, the member under a choice product or MySuper product held by the member by taking out or maintaining insurance.




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