After passing in Parliament in June, minister for superannuation Jane Hume and Treasurer Josh Frydenberg said on Thursday that the reforms will save “workers $17.9 billion over 10 years by putting strong downward pressure on fees, removing unnecessary waste and increasing accountability and transparency”.
The Morrison government said the regulations:
- Ensure the final methodology applied for the annual performance test is further strengthened to incentivise underperforming products to reduce fees as soon as possible.
- Prescribe the definition of a “stapled fund”, including tie‑breaker rules for determining which fund is to be an employee’s stapled fund where they have multiple existing funds.
- Specify how products will be ranked on the online YourSuper comparison tool.
- Prescribe the information that must be included with the notice of an Annual Members’ Meeting.
- Further strengthen the prohibition on funds offering inducements to employers.
“The changes to the regulations announced are measured, justified and in the long-term interests of superannuation fund members,” ASFA chief executive Dr Martin Fahy said.
Dr Fahy added that amendment to the performance test to incorporate current administration fees will “reflect the downward momentum we have seen in fees as a result of the government’s initiatives to enhance member returns”.
“ASFA is pleased that the final regulations have addressed the concerns of wider industry stakeholders and the changes made will allow members to achieve better long-term retirement savings outcomes,” he said.
In regard to the performance test, funds will be required to notify members if they fail the test, while underperforming products will be prevented from taking on new members.
Members will be notified by 1 October 2021 if their fund fails the test.