Last year’s federal Budget and the release of the Retirement Income Review will have significant impacts on superannuation for employers and funds in 2021.  

Successive Federal Governments have made updates to superannuation, not only in regard to contributions, tax treatment and the payment of benefits, but more recently to the obligations and requirements of employers and superannuation funds. 

2021 is predicted to continue this trend, following a number of significant announcements made in last year’s Federal Budget, and comes at a time where debate has become increasingly louder regarding the legislated increase to the Superannuation Guarantee, which is due to increase from 9.5% to 10% from 1 July 2021, and then in 0.5% increments at 1 July each year, reaching 12% from 1 July 2025. 

The federal Budget 

As part of the Federal Budget in October last year, the government announced the “Your future, your super” package with four key areas of focus: 

  • Preventing the creation of unintended multiple superannuation accounts, by ensuring a member’s superannuation is “stapled” to them, staying with them as they change jobs. 
  • Making it easier for members to compare between and choose a well-performing product. 
  • Preventing the creation of unintended multiple superannuation accounts, by ensuring a member’s superannuation is “stapled” to them, staying with them as they change jobs. 
  • Making it easier for members to compare between and choose a well-performing product. 

It’s important to note these are only proposed changes by the government and have not been legislated. 

A new tool will help people to compare super funds 

It is proposed that from 1 July 2021, an online YourSuper comparison tool will allow consumers to compare the fees and performance of superannuation funds, assisting them in deciding which superannuation product best meets their needs. The YourSuper tool will: 

  • Provide a table of simple super products (MySuper) ranked by fees and investment returns. 
  • Link users to super fund websites where they can choose a MySuper product. 
  • Show users their current super accounts and prompt them to consider consolidating accounts if they have more than one. 

MySuper products will be subject to an annual performance test 

The Budget also announced that super funds offering MySuper products will face greater regulatory scrutiny and will be required to pass an annual performance test. In particular: 

  • If a fund is deemed to be underperforming, it will need to inform its members of its underperformance, initially by 1 October 2021, and provide information about its underperformance on the YourSuper comparison tool. 
  • Underperforming funds will be listed as underperforming on the YourSuper comparison tool until their performance improves. 
  • Funds that fail two consecutive annual performance tests will not be permitted to accept new members unless their performance improves. 
     

Super funds will follow members to new job 

Account “stapling” is also proposed to be introduced from 1 July 2021, meaning that: 

  • If an employee does not nominate an account at the time they start a new job, employers will pay their superannuation contributions to the employee’s existing fund. 
    • Employers will obtain information about the employee’s existing superannuation fund from the ATO. 
  • If an employee does not have an existing superannuation account and does not make a decision regarding a fund, the employer will pay the employee’s superannuation into the employer’s nominated default superannuation fund. 

More information on these topics will be shared as the details are finalised and become legislated, particularly, how identifying a new employees’ “stapled fund” will be managed between employers and the ATO. 

Not currently with Sunsuper? 

If you’re not already with Sunsuper and you want to start making a real difference to you and your employee’s retirement today – it’s easy to join. To become a member, simply join online at sunsuper.com.au or if you’re an employer, register with Sunsuper’s Employer Online through our secure online system in only 5 to 10 minutes. 

Prefer to speak to a member of our team? Call our Contact Centre on 13 11 84 between 8.00am to 6.30pm (AEST) Monday to Friday. 

This article has been prepared and issued by Sunsuper Pty Ltd (ABN 88 010 720 840, AFSL No. 228975) the trustee and issuer of the Sunsuper Superannuation Fund (ABN 98 503 137 921, USI 98 503 137 921 001). It contains general advice and does not take into account the investment objectives, financial situation or needs of any particular individual. You should consider if the advice is appropriate to your own circumstances before acting on it. Outcomes are not guaranteed. Past performance is not a reliable indication of future performance. You should also consider the relevant Product Disclosure Statement (PDS) before deciding to acquire or continue to hold any financial product. We are committed to respecting your privacy. Our formal privacy policy sets out how we do this. For a copy of the PDS or Privacy Policy, please phone 13 11 84 or go to sunsuper.com.au