Important changes to super legislation are coming
What you need to know
On 17 June 2021, the Australian Government passed new superannuation legislation in Parliament called Your Future, Your Super (YFYS). This has been designed to make some permanent changes to the way our superannuation system works.
It is expected the majority of changes will become law on 1 July 2021, with the exception of ‘member stapling’ that will be delayed until 1 November 2021.
A snapshot of what it entails
There are three main components in the YFYS legislation:
- Member stapling: This is where working Australians will be tied to one super fund for life, unless they actively choose otherwise.
- Performance test: An annual performance test that compares fund performance on an ‘apples to apples’ basis.
- Best financial interests duty: This duty includes the requirement for superannuation trustees to demonstrate that all expenditure is in a member’s best financial interests.
What changed during the debate in Parliament?
We’ve been advocating on behalf of our members to reduce the potential impact of the proposed reforms on our members, their families, employers and community to help protect their retirement savings.
Some of the important amendments to the legislation include:
- Removing the power for the Treasurer of the day to ban any investments even if they are in the members best interests.
- A delay to the introduction of stapling – that is tying a member to their very first fund for life – until 1 November 2021. This was originally due to commence on 1 July 2021.
Four key actions for employers
- From 1 November 2021, if a new starter does not choose their own super fund, employers will need to manually search for each new employee’s super fund account via an ATO Portal, one at a time.
- Employers can help educate and inform their employees about the upcoming legislation changes to super to enable them to take action with their super if required.
- If an employee chooses to change their super fund, they will need to complete a choice form and submit to their HR/payroll team to action.
- Performance of your super fund could potentially impact a member’s retirement savings. You can direct employees to review the ATOs YourSuper comparison tool from 1 July 2021.
Read more about what this means for employers.
We are still awaiting all of the final details regarding regulations which will determine how YFYS operates in practice. Once we have further information, we will share this with you.
We’re here to help
We’re here to help you understand these changes and stay on top of super obligations. If you have any questions about these changes, get in touch with our employer relations team on 1300 878 737.
Learn more about Your Future, Your Super and how this may impact employers and employees.