$52.5 billion more in super if all Choice super switched to MySuper

Total superannuation could be $52.5 billion higher in a decade, in today’s dollars, if all Choice super accounts were switched over to MySuper, new research has found.

“Higher returns and lower fees of MySuper products could continue to have a material impact on the superannuation market over the next 10 years,” says RiceWarner. RiceWarner was commissioned to conduct the research by the Australian Institute of Superannuation Trustees (AIST).

“There is a general view that members who choose to invest their superannuation assets outside MySuper products should achieve a better outcome as they are tailoring their investment decisions to their personal circumstances and financial goals. However, our analysis shows that this is not generally the case.” Read more...

ASIC reportedly investigating MySuper transition fee gouge

ASIC is reportedly investigating if super funds gouged fees from members by only transitioning them to MySuper products at the last minute.

Default superannuation accounts were required to be transferred to MySuper products during a four year transition period, which ended 1 July 2017. In 2016 Industry Super Australia released a report accusing ‘bank-owned’ retail super funds of “gouging” up to $1.8 billion from super fund members by only slowly moving them to MySuper products. Read more...

‘Smart defaults’ for super could boost retirement savings by 35%

‘Smart defaults’ for super funds could boost annual super fund returns by 3.5%-4.5% per year, increasing balances at retirement by 35%.

The Financial Services Council (FSC) says that new technology allows for individually tailored superannuation products, but the default MySuper system is not taking advantage of these opportunities.

“Millions of Australians in MySuper are missing out on up to a third of their retirement balance because of the inertia created by a lack of genuine competitive forces targeting better retirement outcomes,” said the FSC. Read more...

MySuper roll-over tax relief changes pass Parliament

Tax relief for mandatory roll-over to a MySuper product within a superannuation fund has passed the Parliament, over two years after the change was announced.

The Treasury Laws Amendment (2017 Measures No. 4) Bill 2017 passed the Senate on Thursday, without amendment. It is yet to receive Royal Assent.

The Explanatory Memorandum (EM) says that the transfer to a MySuper product may create an income tax liability from the realisation of fund assets. Tax relief was already available for a transfer to a MySuper product in another super fund, but not the same fund. Read more...

MySuper roll-over tax relief Bill introduced to Parliament

A Bill to provide tax relief for the mandatory roll-over to a MySuper product within a superannuation fund has been introduced to Parliament, almost two years after the measure was announced.

This change, among others, is contained in the Treasury Laws Amendment (2017 Measures No. 4) Bill 2017.

“As a transfer of a default member’s account balance may create an income tax liability from the realisation of fund assets, asset roll-over relief is currently available for such a transfer to a MySuper product in another superannuation fund to ensure that the default members are not disadvantaged,” says the Explanatory Memorandum (EM) to the Bill. Read more...

MySuper transfer CGT relief Bill to be introduced to Parliament

The Government plans to introduce legislation to Parliament to provide CGT relief where superannuation balances are transferred within a fund into a MySuper product.

The Treasury Laws Amendment (2017 Measures No. 4) Bill is planned to be introduced in the winter sitting of Parliament, which starts today. The Bill will “provide a Capital Gains Tax rollover where a superannuation fund transfers the balances of members from default superannuation funds to MySuper compliant funds, and the assets which support those balances,” according to the Legislation proposed for introduction in the 2017 Winter sittings document. It will also “address existing integrity issues that will be exacerbated by the superannuation reform measures”. Read more...

Retail super members “gouged” $1.8 billion by slow MySuper transition

Industry Super Australian has accused retail and ‘bank-owned’ super funds of “gouging” up to $1.8 billion from superannuation fund members by slowing the transition to MySuper products.

Industry Super Australia says retail super funds will collect between $800 million and $1.8 billion in additional fees from super fund members by leaving default super fund members in legacy default products until required to transition. Super funds have been allowed until July 2017 to transfer accounts in default investment options to MySuper products. Read more...

Speed up transition to MySuper to benefit members, says AIST

MySuper transition, AISTThe Australian Institute of Superannuation Trustees (AIST) has called for the Government to accelerate the transition to MySuper default super funds from “high-fee bank-owned default super funds.”

Under the Stronger Super changes superannuation fund trustees have until 1 July 2017 to transfer the balances of existing default members to a MySuper product.

This means that “hundreds of thousands of consumers are paying higher fees for their super and missing out on the benefits of the MySuper reforms,” said AIST Executive Manager David Haynes.

APRA starts to release MySuper statistics

APRA MySuper statisticsARPA has started to release MySuper superannuation fund statistics. According to APRA there are 116 MySuper products, holding total assets of $ 363.2 billion.

“The statistics provide a central source of information on MySuper products and support the broader transparency objectives of the Stronger Super reforms,” said APRA member Helen Rowell.

This release of statistics covers the September 2013, December 2013, March 2014 and June 2014 quarters. APRA has a duty under the SIS Act to publish quarterly MySuper Statistics, including “fees charged, costs incurred and net returns”.