Your Future, Your Super is Australia’s $3 trillion superannuation system and it is the fourth largest in the world and is responsible for managing the retirement savings of 16 million Australians.
The Government’s Your Future, Your Super reforms have been announced in the Federal Budget. From 1st July 2021, the following changes will come into effect.
Superannuation that follows you.
- The government intends employees to keep their super fund when they change jobs, and thus stop the additional creation of unintended multiple super accounts and the erosion of super balances.
- Employers will pay super to an employee’s existing superannuation fund unless the employee selects another fund.
- Employers will get information about an employee’s existing super fund from the Australian Tax Office (ATO) by logging onto ATO online services.
- If an employee does not have an existing super fund account and does not decide on a fund, the employer will pay the employee’s superannuation into their nominated default fund.
How will this help workers?
There is an estimation from the government that this measure will result in 2.1 million fewer unintended multiple accounts over 10 years. It will save workers about $2.8 billion by avoiding duplication of fees, lost earnings at that time, and insurance.
Why have just one super account?
It is observed that some workers may intentionally have multiple super accounts for insurance or investment reasons. However, many other workers may have more than one super account unintentionally.
The benefits of consolidating your super account can include:
- Paying fewer fees: Having one super account could mean paying fewer fees.
- Less paperwork: Only one statement when you have a single super account.
- Easier tracking: A single super account is easily manageable.
- Avoiding duplication of premiums: Only a single super account reduces your chances of paying multiple insurance premiums.
Comparing super funds: fees and performance
Selecting a single well-performing superannuation product is way better than selecting an underperforming one, this could significantly boost an individual’s income in retirement. The Government intends to make it easier for workers to compare their options by creating a new, interactive, online YourSuper comparison tool.
According to the government, the comparison tool could have the following features:
- Include a table showing simple super products (MySuper) ranked by fees and investment returns.
- Will link you to various super fund websites where you can choose a MySuper product.
- Display your current super accounts for your knowledge and prompt you to consider consolidating accounts if you have more than one.
More further details will be announced as the comparison tool is developed.
Please note that some of these announcements are yet to be formulated and may be subject to change. PND Accountants will keep you updated on further announcements.
Call us or enquire us for more clarity on Your Future Your Super, one of your trusted and experienced Tax Accountants in Melbourne – PND Accountants & Advisors.
