ING urges clients to register TFN to protect life cover

super fund insurance taxation australian taxation office life insurance

22 May 2007
| By Liam Egan |

ING is urging clients to register their Tax File Number with their super fund to ensure their life insurance cover is protected when the new Simpler Superannuation rules take effect on July 1.

Head of marketing and retail products Mark Vilo said that while it will not be mandatory for people to supply their TFN to their super fund from July 1, the “financial implications of not doing so could be costly for members with stand-alone life insurance via a super fund”.

“Where a super fund does not have a member’s TFN, concessional contributions (deductible contributions) will be slugged with an effective tax rate of 46.5 per cent, and funds will be unable to accept non-concessional (undeducted) contributions.

“This effectively means tax must be withheld from concessional contributions, leaving insufficient funds to cover the cost of the premium. In addition, as non-concessional contributions cannot be accepted, this means insurance premiums cannot be paid.

“Either way, the effect of not supplying a TFN is that a member’s policy will lapse and they will lose their valuable (life cover) protection,” he said.

The TFN implications are of such concern to ING that it is in the process of writing to all its stand-alone risk insurance members who have so far failed to provide a TFN, according to Vilo.

Last week it was announced that the Australian Taxation Office (ATO) was also writing to more than 1.85 million people whose super fund or retirement saving account does not have their TFN, to let them know their TFN was being provided to their superannuation fund.

Anyone who does not want their TFN provided to their fund or retirement savings account is required to contact the ATO within 28 days of receiving the letter.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

2 days 8 hours ago

Interesting. Would be good to know the details of the StrategyOne deal....

6 days 14 hours ago

It’s astonishing to see the FAAA now pushing for more advisers by courting "career changers" and international recruits,...

3 weeks 4 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

2 weeks 6 days ago

A former Brisbane financial adviser has been charged with 26 counts of dishonest conduct regarding a failure to disclose he would receive substantial commission payments ...

5 days 12 hours ago

Pinnacle Investment Management has announced it will acquire strategic interests in two international fund managers for $142 million....

4 days 15 hours ago