The Treasury Laws Amendment (Your Future, Your Super) Bill 2021 has passed both houses of Parliament making changes including: “stapled” single default accounts, a best “financial” interests duty for trustees and APRA benchmark testing of investment performance. See related TT article about the detail in this Bill.
See below for further details about the Bill as passed.
The Treasury Laws Amendment (Your Future, Your Super) Bill 2021 awaits Royal Assent after being passed by both Houses on 17 June 2021 with 8 Government amendments in the Senate (to which the House of Reps agreed). The Bill implements the Government’s Your Future, Your Super (YFYS) reforms from the 2020-21 Budget.
This Bill was introduced into Parliament on 17 February 2021 and, as it proceeded through both houses, in June this year, there were 4 amendments moved in the Lower house and 9 amendments moved in the Senate.
In a joint 17 June 2021 Media Release, however, the Treasurer and Minister for Superannuation welcomed these and other superannuation changes, saying the measures are expected to save $17.9bn over 10 years by:
- Having superannuation follow an individual – preventing the creation of unintended multiple super accounts when employees change jobs. This will commence from 1 November 2021.
- Making it easier to choose a better fund – with access to a new interactive online YourSuper comparison tool. This will commence from 1 July 2021.
- Holding funds to account for underperformance – to lower fees and protect members from poor outcomes. Superannuation products will be required to meet an annual objective performance test conducted by APRA. Those that fail will be required to inform members and persistently underperforming products will be prevented from taking on new members. Members will be notified by 1 October 2021 if their fund fails this test.
- Increasing transparency and accountability – trustees will be required to act in the best “financial” interests of members and provide better information regarding how they manage and spend members’ money in advance of Annual Members’ Meetings and through enhanced Portfolio Holdings Disclosure.
The most important amendment was to remove the regulation making powers to prescribe additional requirements where failure to comply with the additional requirements would be a contravention of the proposed best financial interests duty for trustees (see Amendments and related EM).
Another of the amendments was to delay the application of the ‘single default account’ amendments so that they applies to employees commencing employment on or after 1 November 2021 (instead of 1 July 2021). Delaying the application date to 1 November 2021 seeks to align the single default account amendments with the notice of the outcomes of the first annual APRA performance test for MySuper products. (See amendments and related EM).