On 22 August 2012, Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 was passed with Government and Greens amendments.
As noted in the Supplementary Explanatory Memorandum, the Bill establishes the framework for registrable superannuation entity (RSE) licensees to be authorised by the Australian Prudential Regulation Authority (APRA) to offer a MySuper product. Trustees may offer MySuper products from 1 July 2013. However, employers are required to make contributions for employees that do not have a chosen fund to a fund that offers a MySuper product from 1 October 2013. This provides a three month transitional period from when MySuper products may commence to be offered, to the date it becomes mandatory for employers to make contributions for employees that do not have a chosen fund to a fund that offers a MySuper product.
The Bill also generally requires that each member who holds a MySuper product must be charged the same fees.
There are two Government amendments to the Bill.
The first amendment defers, from 1 October 2013 to 1 January 2014, the date from which an employer must make contributions for employees that do not have a chosen fund to a superannuation fund that offers a MySuper product. A corresponding change will also defer, from 1 October 2013 to 1 January 2014, an RSE licensee’s obligation to pay member contributions to a MySuper product unless a member has elected, in writing, for contributions made on their behalf to be paid to a specified choice product or products.
The second amendment allows RSE licensees to charge different investment fees in a MySuper product if it has a lifecycle investment strategy, it charges no more than four investment fees and the investment fees for the age cohorts reflect a fair and reasonable attribution of the investment costs of the fund between the age cohorts.
The Greens amendments seek to prohibit moving an individual's investment from a tailored MySuper product into another without their consent. This means that, if an employee who is defaulting into their employer's superannuation fund leaves a large employer, then the superannuation fund will no longer be able to switch them out to another public MySuper product.
In media release No 2012/053, issued 22 August 2012, the Minister for Employment and Workplace Relations and Minister for Financial Services and Superannuation, Bill Shorten, commented on the passage of the legislation.
The Bill now proceeds to the Senate.