10 December 2015
Media Release - #2015036, 2015

Common sense changes to superannuation to benefit Australians

The Minister for Small Business and Assistant Treasurer the Hon Kelly O'Dwyer MP today released draft legislation to improve superannuation fund transparency and to extend choice of fund arrangements to more Australians.

"The Turnbull Government is laying the foundations for a stronger superannuation system that better supports Australians," Minister O'Dwyer said.

“The changes will ensure that Australians are able to better understand and compare the performance of superannuation funds across the industry, to see where their funds are invested and have greater ability to switch funds, if they choose to do so.

"While most employees can already choose the fund their compulsory superannuation is paid to, in cases where their enterprise agreement specifies a fund, employees have no choice.

“It doesn't make sense to force employees to save money in superannuation, but then leave key decisions about how it is managed outside their control.

“These changes implement the Government's response to the Financial System Inquiry (FSI) recommendation and will ensure more employees will be able to choose their fund, if they wish to," Minister O'Dwyer said.

The exposure draft legislation will enable employees covered under enterprise agreements or workplace determinations that are made from 1 July 2016 to choose their own super fund. This will extend choice to up to 40 per cent of the estimated 2 million employees who do not currently have choice of fund.

The change also means that people with multiple jobs who may currently be forced to maintain more than one superannuation account will be able to consolidate their retirement savings to ensure their savings are not unnecessarily eroded by multiple sets of fees and insurance premiums.

"The draft legislation also implements the Government's election commitment to improve the quality of information available to super fund members and employers so that they can make informed decisions when comparing the relative performance of funds," Minister O'Dwyer said.

Transparency through improved disclosure is critical to the efficiency and operation of Australia's market based superannuation system. It improves understanding, awareness and engagement across the community, and can also lead to greater competition and accountability.

The superannuation transparency exposure draft will require super funds to develop product dashboards for their top ten (by value) superannuation choice investment options and to disclose investments made both directly and through associated entities.

“The aim of these changes is to strike the right balance between enhancing transparency and comparability of information for members, and minimising the compliance burden on superannuation funds," Minister O'Dwyer said.

The exposure draft material can be found on the Treasury website. I encourage stakeholders to have their say on these important reforms. Consultation is open until 20th January 2016.