Superannuation funds will be allowed to offer the MySuper product as recommended by the Cooper review, the Labor government announced yesterday.
From July 2013, people will have access to the low-cost simple superannuation product.
In its announcement, the Labor government will introduce a number of standards that the MySuper product must comply with.
These standards include, no entry fees with exit fees limited to cost-recovery. A ban on commissions in relation to retail distribution and advice, a single and simple investment option and standardised reporting requirements.
Superannuation providers will also have to comply with new requirements in order to deliver value for money or they risk being stripped of their licence, the Labor government announced.
The Australian Prudential Regulation Authority will also regulate MySuper funds.
Under the Labor government's initiatives, regulation will be introduced from July 2011 to ensure that tax file numbers will be the primary identifier of member accounts.
The Labor government claims that the MySuper product will lower fees by up to 40 per cent for a 30-year-old worker, lifting their retirement savings by $40,000.
The new reforms will make it much more affordable and workable for super funds of all shapes and sizes to offer MySuper products, the Australian Institute of Superannuation Trustees chief executive Fiona Reynolds said.
Reynolds said that most not-for-profit funds, which already offer low-cost, commission free super would apply for MySuper products.
