18 Feb 2021 Legislation
Your Future, Your Super: Bill introduced
The Treasury Laws Amendment (Your Future, Your Super) Bill 2021 was introduced into Parliament on 17 February 2021.
The measures will save Australian workers $17.9 billion over 10 years by holding underperforming funds to account and strengthening protections around the retirement savings of millions of Australians. The Bill contains three schedules which are summarised below.
Single default account
Schedule 1 to the Bill amends the Superannuation Guarantee (Administration) Act 1992 to limit the creation of multiple superannuation accounts for employees who do not choose a superannuation fund when they start a new job.
Date of effect: Schedule 1 applies in relation to an employee’s employment where that employment starts on or after 1 July 2021.
Addressing underperformance in superannuation
Schedule 2 to the Bill amends the Superannuation Industry (Supervision) Act 1993 (SIS Act) to require APRA to conduct an annual performance test for MySuper products and other products to be specified in regulations (such as ‘trustee-directed products’ where the trustee has control over the design and implementation of the investment strategy).
Date of effect: Generally, the amendments made by Schedule 2 apply in relation to MySuper products on and after 1 July 2021 and apply in relation to other products specified in the regulations on and after 1 July 2022.
Best financial interests duty
Schedule 3 to the Bill amends the SIS Act to:
- require each trustee of a registrable superannuation entity and each trustee of a SMSF to perform the trustee’s duties and exercise the trustee’s powers in the best financial interests of the beneficiaries;
- require each director of the corporate trustee of a registrable superannuation entity to perform the director’s duties and exercise the director’s powers in the best financial interests of the beneficiaries;
- allow regulations to be made that prescribe additional requirements on trustees and directors of trustee companies of registrable superannuation entities where failure to comply with these additional requirements would be a contravention of the best financial interests duty;
- allow regulations to be made to specify that certain payments made by trustees of registrable superannuation entities are prohibited, or prohibited unless certain conditions are met (regardless of whether the payment is considered by a trustee to be in the best financial interests of the beneficiaries);
- reverse the evidential burden of proof for the best financial interests duty so that the onus is on the trustee of a registrable superannuation entity. The reverse onus does not apply to additional best financial interest duty requirements prescribed by regulations; and
- allow contraventions of record-keeping obligations specified in regulations to be subject to a strict liability offence to provide regulators with an additional option to respond to compliance issues relating to record-keeping requirements.
Schedule 3 to the Bill also amends the Corporations Act to remove an exemption from disclosing information about certain investments under the ‘portfolio holdings disclosure’ rules.
Date of effect: These amendments in Schedule 3 apply from 1 July 2021.
You can also read the Treasurer, the Hon Josh Frydenberg MP’s media release on the reforms here.