The new rules called Putting Members' Interests First start April 1st 2020.
Why is this important?
Most people automatically get a small level of Life Insurance and Total & Permanent Disablement (TPD) insurance when they join a super fund.
Your superannuation is your forced savings for your retirement, so it’s important to understand these two key features:
If you plan on leaving your superannuation to your now adult kids when you pass away, there's a strong possibility your super death benefit payout will be hit with tax.
While this is a very complicated task (and perhaps the stuff of urban legend) it's worth setting the story straight; so you know where you stand with your super.
Simply put, you can nominate in writing who you want to receive any future payout with a Beneficiary Nomination or Binding Death Nomination (depending upon what you choose).
The good news is if you want to help you can put money into their super, and you might be eligible for a personal tax offset, while helping to create a better future.
After all putting extra money into your mortgage means you can pay off your debt quicker and save interest, but putting extra money into super builds your retirement nest egg.
Sounds like an impossible choice?
With superannuation now becoming a compulsory part of life, many people soon find they have significant amounts in their super growing at 9.5% per year - the minimum compulsory amount all employers are required to withhold from your income and deposit into your super account, for your retirement.
In reality, if you passed away today, the value of your super account could be significantly higher because of a ‘hidden’ life insurance component.