The government is taking action to make Australia’s superannuation system more transparent but individuals still need to take
ownership of their super and think about how the changes impact them. Super is not the set and forget savings scheme many
think it is.
Here are some of the latest changes to be aware of.
More super from your employer.
It’s not 100% official but the Government is expected to lift the Superannuation Guarantee (SG), the proportion of money
employers are required to divert to employees’ super, from 9.5% to 10.0% on 1 July 2021. The SG has been frozen at 9.5% since
2014 – lifting the rate is aimed at channelling more savings into super, which is one of the three key pillars of retirement savings.
A new job no longer means a new super account.
Happy with your existing super account? Instead of being diverted into a new employer’s default super fund, as of 1 July 2021,
workers will automatically retain their super account unless they notify their employer otherwise. This change gives people a
greater voice in their choice of super account and will reduce the number of super accounts people have, which will help minimise
fees and grow balances. It’s known as ‘stapling’ and means that your super account moves with you as you change jobs.
Employers will need to take these steps when hiring a new employee:
- An employer must find out from the Australian Taxation Office (ATO) if a new employee has an existing super fund.
Employers will be required to make payments to that account if the employee does not notify them otherwise. - Alternatively, a new employee can inform their employer of their preferred fund using the standard choice form.
- If the new employee doesn’t have an account and does not let their new employer know which fund they have
chosen, the employer will then be allowed to create, on the new employee’s behalf, an account with its nominated
default superannuation fund.
Greater scrutiny on super fund decision making and performance.
There is a greater requirement for transparency under the latest super reforms. Super fund administrators will need to
communicate why investment decisions have been made and how these were done with the best interests of members in mind.
Fund performance will be monitored through an annual performance test and the results will be publicly available. Funds that
fail two tests will be closed to new members. Testing will begin with MySuper products in July 2021 and rolled out to all super
products from July 2022. In this context, it pays to be on top of your fund’s performance
If you need help deciding what’s right for your super, reach out to the Sherlock Wealth team to discuss your unique situation here
This information is current as at February 2021. This article is intended to provide general information only and has been prepared without taking into account any
particular person’s objectives, financial situation or needs (‘circumstances’). Before acting on such information, you should consider its appropriateness, taking
into account your circumstances and obtain your own independent financial, legal or tax advice.
