Your future, your super
The Federal Government’s Your Future Your Super legislation received royal assent in June 2021 and will introduce substantial changes to the way super is provided for employees from 1 July 2021.
The key element of this legislation is known as stapling. Stapling has been designed to reduce the number of super accounts inadvertently held by Australians and the resulting duplication of fees and costs from retirement savings. Historically, employees were provided with a choice of super fund form when starting with a new employer. If the new employee did not elect to choose a super fund, then their contributions would default to the employer’s chosen fund. This resulted in some less engaged employees ending up with multiple super accounts. Stapling will introduce a single default account for an employee whereby once you have a fund (such as from your first job), you stay with it for life unless you actively choose to move to a new fund – any new employers have to pay contributions to your existing fund unless you direct them otherwise. This measure will apply from 1 November 2021.
Now is probably a good time to consider consolidating your super into one account of your choice – contact our Member Advice Consultants if you want help with this. Remember to look at returns, fees, insurance and other benefits when choosing a fund – for example, AvSuper insurance covers occupations often not covered in other funds.
There are also several other measures covered by the legislation, all of which will commence at 1 July. These include:
- an online comparison tool called Your Super which will be administered by the ATO to allow people to compare MySuper products over a defined set of criteria
- an annual performance test for MySuper products over a set of government determined benchmarks
- a change in the obligations of super fund trustees to act in the best financial interest of their members (changed from members’ best interests) which among other things will see an increase in information and disclosure in Fund reporting.
The regulations associated with Your Future Your Super are still in draft so some of the detail around these measures still needs to be confirmed.
At AvSuper, we have always concentrated on achieving our stated investment objectives and keeping our costs low to help deliver on your best retirement outcomes.
We are pleased to say that our returns have exceeded our objectives for the last ten years (see the returns in the right hand column) while closely managing the level of risk that we have taken to achieve them.
Compensating for the COVID-19 early access to superannuation
For those members who utilised the Federal Government’s COVID-19 early release of super up to 31 December 2020 and who would now like to boost their super, then from 1 July 2021 you can make contributions up to your early withdrawal amount. These recontribution amounts will not count towards concessional contribution caps and cannot be claimed as tax deduction. This measure ends on 30 June 2030.
Bring forward arrangements extended to everyone under 67
The bring forward rule means that a member can make a contribution of up to $300,000 in one year by using their contribution cap for the following one or two years as well. This larger contribution is not penalised for breaching the non-concessional contribution cap, and the member could then not make contributions for the following two years.
Currently, this applies to members up to 65. For non-concessional contributions made on or after 1 July 2020, the bring forward rule will also apply to members aged 65 and 66.
excess concessional contributions charge
For financial years starting from 1 July 2021, there will no longer be an excess concessional contributions charge for members making contributions above their cap.
For full details on contribution caps, including concessional contributions (increasing to $27,500 on 1 July) and for our Defined Benefit members, please refer to our understanding contribution limits fact sheet.
Do we have your current contact details?
With the unexpected changes to work practices this year, it is more important than ever that we can contact you if required. Please log into AvSuper Online (AOL) or call us to check we have your phone and email address correctly recorded.
10 year 8.05% (objective 6.05%)
5 year 7.9% (objective 5.5%)
3 year 7.5% (objective 5.1%)
1 year 18.5% (objective 4.7%)