What are the new changes to super?
The latest changes to super in Australia cover three key areas:
- Changes to the default superannuation system to ‘staple’ members to accounts
- New YourSuper comparison tool
- Performance test for MySuper products
These changes were announced in the October 2020 Federal Budget. Further changes were proposed in the May 2021 Federal Budget, but they are yet to be legislated.
Your Future, Your Super
The Federal Budget 2020 announced a number of changes to superannuation under a reform package entitled Your Future, Your Super, including:
Changes to the default superannuation system to ‘staple’ members to accounts
The new rule means that you will be ‘stapled’ to the first fund you sign up with or the fund you are with now. So when you move jobs, your super fund (account) will move with you unless you choose a different fund. That doesn't mean you are stuck with that fund though. Most people can still change to any fund they want at any time they like. This change comes into effect on 1 November 2021.
New YourSuper comparison tool
The government has introduced an online comparison tool to provide Australians with information about fees and returns. The ATO administers the site, which launched on 1 July 2021.
Performance test for MySuper products
The government has introduced a performance test for MySuper products. Products that fail the test will be required to write to their members informing them they are in an underperforming product. Two consecutive failures may mean that product cannot accept new members. The performance test will commence by 31 August 2021.
Contribution cap rise
On 1 July 2021, the concessional (before-tax) super contribution cap increased from $25,000 to $27,500 and the non-concessional (after-tax) contribution cap increased from $100,000 to $110,000. More information about this can be read here.
The changes to superannuation rules above are all in effect today, however a number of other proposed changes may be in the pipeline. The latest changes to pensions may also affect your retirement planning or income.