The Federal Government has introduced a series of reforms, known as ‘Stronger Super.’
These reforms are set to deliver major changes to Australia’s superannuation system. Stronger Super will impact super funds, their members and employers.
The aim of the reforms is to create a more efficient super system focused on the best interest of members.
Some elements of the reforms are:
MySuper
MySuper is a simple, low-cost superannuation product that will replace the current default products and become the new default superannuation fund for businesses.
MySuper has been introduced to help simplify and give greater transparency to superannuation systems. MySuper accounts will offer lower fees and simpler features, so members will not have to pay for services they do not need.
As of 1 January 2014, businesses must be paying their superannuation contributions to an authorised MySuper fund. Business owners only need to choose a new super fund if their current one is not MySuper authorised.
Employees are still able to select their own fund, or manage their superannuation affairs through a self-managed superannuation fund.
SuperStream
SuperStream is the name for a range of proposals designed to improve the processing of everyday superannuation transactions.
SuperStream is aimed at increasing the processing speed of transactions, reduce error and remove human involvement from the system to reduce the time between the employer’s contribution being made and its allocation into the members account.
From 1 July 2014, employers with 20 or more employees will have to be compliant with SuperStream, and smaller employers will have to be compliant from 1 July 2015.
SMSF
Individuals with a SMSF will need to provide their employer with their fund’s ABN, bank account details and electronic service address to ensure they comply with the superannuation changes.
This information should be provided by 31 May 2014 to ensure that the individual’s super does not go into a default fund.
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