Regulations to support the Your Future, Your Super reforms have been registered just under two months after the reforms passed Parliament, clarifying a number of points that remained unclear.
In a joint press release issued by Minister for Superannuation Jane Hume and Treasurer Josh Frydenberg, the pair stressed the importance of YFYS’s removal of “unnecessary waste” and its contribution to increasing accountability and transparency.
According to the duo, the finalisation of the reforms has meant the final methodology applied for the annual performance test has been further strengthened to incentivise underperforming products to reduce fees as soon as possible.
“The final performance test methodology will see the administration fee component of the test based on the administration fee charged by the product over the most recent financial year, benchmarked against peers,” Ms Hume and Mr Frydenberg said.
This approach is hoped to address historical anomalies, including with respect to millions of multiple unintended and inactive accounts, delivering “immediate benefits” to consumers.
“The annual performance test will protect members from poor outcomes,” they noted.
“Funds will be required to notify members if they fail the test and persistently underperforming products will be prevented from taking on new members. Members will be notified by 1 October 2021 if their fund fails this test.”
Moreover, the newly issued regulations provide a definition of a “staple fund”, while also setting out specifics on how products will be ranked on the online YourSuper comparison tool.
The YourSuper comparison tool will be available on an interactive website designed to make it easy for beneficiaries to choose a super product based on net returns and total annual returns. The comparison tool is expected to allow members to make informed judgements on the value of the fees that they pay and promote competition between superannuation funds.
The Your Future, Your Super reforms have been celebrated as “the most significant since the introduction of compulsory superannuation in 1992”.
