For more information on the current parliamentary discussion about these reforms, please see the ‘Super legislation and regulatory update’ article.
Here’s a reminder of the proposed changes:
- “Stapled” super accounts – employers will no longer automatically create a new super account in their default fund for new employees who do not choose a super fund. Instead, employers will be required to search for an employee’s existing (‘stapled’) fund via the ATO’s online services and direct contributions to it. Where there is no stapled fund and no other fund nominated, super contributions can be made into the default fund.
- MySuper benchmarking – APRA will conduct annual benchmarking tests on the net investment performance of MySuper products. Products that underperform over two consecutive annual tests will be prohibited from receiving new members until a further annual test shows they are no longer underperforming.
- Best financial interests duty – to improve transparency and accountability of super funds, the government will legislate to compel super trustees to also act in the best “financial” interests of their members. Trustees will be required to establish a “reasonable basis” to support their actions being consistent with the duty.
The Senate Economics Legislation Committee on 29 April 2021 recommended the Bill be passed.
The Government has now released for consultation exposure draft regulations underpinning this Bill. Consultation will be for four weeks and close on 25 May 2021.