Why was MySuper introduced?
MySuper was introduced in July 2013 to protect Australians from the complexities of superannuation products. Approximately 83% of Australians do not actively choose a superannuation fund, and simply pay into their employer’s default superannuation fund.
When supernannuation was introduced, Australians were deemed to be capable of making a rational choice with regard to their retirement funds; the reality however has been that the majority of people are neither qualified nor sufficiently interested to make an educated choice.
The solution that was created was MySuper, a relatively inexpensive, uncomplicated product; it is a MySuperaccount into which employers now have to pay superannuation contributions as a default option, though the deadline for existing default funds to be paid into a MySuper account is 1 July 2017.
How does a MySuper account work?
To be deemed a MySuper a product, certain criteria must be met:
- Having a single investment strategy
- Each fund can have only one MySuper product on offer
- Death and disability insurance as a minimum, which the member can opt out of
- No commission payable to advisers from the fund without a specific agreement to do so
- Limited financial advice
- Approval of the fund by the Australian Prudential Regulation Authority (APRA)
What do I need to do?
As an employee, you don’t need to do anything. If you are already paying into the default fund of your employer’s choice, this will be transferred by the employer into a MySuper account by 1 July 2017; if you change employer, your new fund will automatically be a MySuper account.
Is MySuper compulsory?
MySuper is designed to provide those who do not wish to review superannuation products available to them, in order to make their own informed choice, with a simple low-cost product.
There is no obligation to have a MySuper superannuation account, and Australians are free to review the options available to them and make their own choices in this regard. If you wish to choose your own fund, and take it with you throughout your employment years, you are free to do so unless you have a restricted fund, such as a public sector fund, which may not be available for a private sector employer to pay into.
MySuper was introduced to provide Australians with an easy to understand, low-cost superannuation product, in the event that they are happy to pay into the default fund of their employer’s choice. It is not designed to restrict choice, but simply to protect the interests of those who do not wish to make an active choice when it comes to their superannuation funds.
For the minority of Australians who understand how superannuation works and wish to shop around for the fund that best suits their risk appetite, nothing has changed, and these options are still open to them.