Superannuation reform >
Over four years commencing 1 July 2021, the Government aims to provide funding to implement the following ‘Your Future, Your Super’ Superannuation Reforms:
YourSuper comparison tool – The ATO will develop an online tool to allow an individual to select from a table of MySuper superannuation products, and compare performance to the individual’s existing superannuation product(s).
‘Stapled’ superannuation accounts – An existing superannuation account will be ‘stapled’ to an individual to avoid the creation of a new account when that person changes their employment. This will be implemented through the development of enhanced payroll software, to automate the provision of existing superannuation account information directly to employers (and therefore reduce the creation of unintended multiple superannuation accounts and the erosion of superannuation balances through duplicated fees).
Accountability for fund underperformance – APRA will conduct benchmarking tests on the net investment performance of MySuper products. Those products that underperform over 2 consecutive annual tests will be listed as ‘underperforming’ on the YourSuper comparison tool, and will be prohibited from receiving new members until a further annual test that shows they are no longer underperforming. Annual performance tests will be extended to other superannuation products from 1 July 2022.
Trustee accountability and transparency – The Government will require superannuation trustees to comply with a new duty to act in the best financial interests of its members and how the trustees are managing member’s retirement savings.
Superannuation Guarantee >
The current compulsory employer superannuation guarantee of 9.5% is legislated to increase to 10% on 1 July 2021. There were no announced changes in the Federal Budget 2020-21 to defer this increase (the rate is progressively increasing until it reaches 12% on 1 July 2025).
COVID-19 responses – superannuation >
Temporary early access to superannuation – individuals have until 31 December 2020 to apply for the temporary early access to their superannuation of up to $10,000.
Temporarily reducing superannuation minimum drawdown rates – the minimum pension drawdown requirements for account-based pensions (and similar products) have been reduced by 50% for the 2019/20 and 2020/21 financial years.
Increase to maximum number of allowable members in SMSFs (and small APRA funds) from 4 to 6 – commencement date has been revised from 1 July 2019 to the date of Royal Assent of the enabling legislation.