The House of Representatives has today passed legislation that will deliver on the Government’s 2010 election commitment to introduce a new simple, low‑cost default superannuation product called MySuper.
Minister for Superannuation Bill Shorten said this reform will put downward pressure on fees and is a significant step towards enhancing the arrangements for worker’s retirement savings.
“It reflects the Gillard Government’s commitment to improving the efficiency, competition, transparency and governance arrangements for the superannuation industry,” Mr Shorten said.
The Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 establishes the core framework for MySuper products, which will replace existing default investment options in superannuation funds from 1 July 2013.
MySuper products will provide a default superannuation product that all Australians can rely on. It will be limited to a common set of features to make it easier for members, employers and other stakeholders to compare performance across MySuper products, putting downward pressure on fees.
The Government responded to stakeholder concerns to defer the date from which it will become mandatory for employers to make employee contributions to a fund offering a MySuper product, from 1 October 2013 to 1 January 2014.
This additional three months will facilitate a smoother transition to the new regime for both employers and superannuation funds. The other Government amendment will enable MySuper products which offer a life‑cycle investment strategy to seek authorisation to charge a maximum of four different investment fees. Previously, these products were limited to a single investment fee. This change will avoid cross-subsidisation between members in different stages of the lifecycle strategy.
“I acknowledge the support of the cross-bench and Coalition for the Government amendments.” Mr Shorten said.
The Government will move to legislate the remaining MySuper measures as soon as possible.
Mr Shorten’s Media Contact: Sam Casey 0421 697 660