Budget 2020-21 – changes impacting super
Due to the Coronavirus pandemic, the Government moved its 2020-21 Budget from the usual early May timeframe, instead handing it down on 6 October 2020.
The main superannuation-related announcements in the Budget make up a package the Government calls ‘Your Future, Your Super’. This has four main components:
- your super will follow you – your superannuation will be ‘stapled’ to you, so you will keep your existing super fund when you change jobs unless you specifically choose another fund. This is intended to stop the creation of unintended multiple super accounts.
- empowering members – there will be a new online ‘YourSuper’ comparison tool to help you compare and select a super product from a table of MySuper products through the ATO’s YourSuper portal. This aims to make it easier to compare the fees and performance of super funds.
- holding funds to account for underperformance – super will be ‘benchmarked’ each year on their net investment performance. If your super product has underperformed against the benchmark, your fund will have to disclose this to you and give you the option to move to another fund. Products that have underperformed two years in a row will not be able to accept new members until they are no longer underperforming.
- increasing transparency and accountability – super fund trustees will have to comply with stricter rules to ensure that expenditure is motivated solely by the best financial interests of members and will have to provide more disclosure about how they are spending members’ money. Your fund will need to provide you with key information ahead of its Annual Members’ Meeting.
Most of these changes are intended to begin to apply from 1 July 2021, with some transitional arrangements before they take full effect.
Budget announcements are yet to be legislated and details could change as bills are debated in the Parliament. For more details on the Budget, click here.