The legislation will affect public sector superannuation schemes in WA such as GESB.
Robert Zammit, financial adviser at RSM Bird Cameron Financial Services, said this may have unintended consequences for many Western Australians since once a GESB West State account is closed it cannot be reopened.
“GESB West State is a unique super scheme which can provide substantial retirement planning opportunities owing to its status as a constitutionally protected fund,” he said.
“Although individuals may believe their accounts are small and insignificant, they may also have life and disability insurance cover within the accounts. This cover may be lost and irreplaceable once the account is closed.
“GESB will attempt to contact affected members over the next few weeks, and individuals will need to elect to be excluded from any transfers before the 27th February 2015. However, these warnings may prove futile for uncontactable clients. If people are unsure whether they will be affected they should seek personal financial advice.”
GESB has confirmed it will be forced to close accounts and transfer superannuation balances to the ATO if a member is classified as lost, meaning uncontactable or inactive.
According to RSM Bird Cameron, uncontactable means there is no address on the superannuation account or two pieces of mail have been returned to GESB as undeliverable, and the account has not received any contributions over the past 12 months.
The firm said inactive means that a member’s account has not received any contributions in the past five years. This may affect many individuals who are no longer working or contributing to superannuation and are not drawing a regular income from their superannuation.