On 3 November 2011, a Bill Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 was introduced into the House of Representatives seeking to implement some of the key aspects of MySuper — the Government's proposed low-cost default superannuation product. Broadly, the Bill will establish the legislative framework to:
The Bill is the first piece of legislation that will implement the Government's Stronger Super reforms. Remaining provisions will be released in later legislation covering, for example, specific trustee duties in relation to MySuper products.
The Bill has been referred to the Parliamentary Joint Committee on Corporations and Financial Services for report.
For certain employees, employers will need to pay all super guarantee contributions into a MySuper product. The relevant employees are those:
The Government expects that for most employers their existing default superannuation fund will offer a MySuper product.
The Bill will require a MySuper product to meet core criteria. Those criteria will need to be set out in the fund's trust deed and governing rules. The key criteria required include:
The holder of a Registrable Superannuation Entity license (an RSE licensee) will be able to charge only the following fees in relation to MySuper products:
Entry fees will not be permitted.
As insurance premiums are not fees, they can be deducted from member accounts.
If an RSE licensee charges a fee to members of a MySuper product, then it may do so only under one of the fee charging rules to be set out in the Act. The fee charging rules seek to prohibit an RSE licensee from discriminating between members.
However, the fee charging rules do not apply to an administration fee charged to a member of a MySuper product if the member's employer has secured a discounted administration fee under the single employer exemption.
To offer MySuper branded products, an RSE licensee will need APRA's authorisation.
Generally, an RSE licensee will be authorised to offer only one "generic" MySuper product in a fund. However, the licensee will also be able to apply:
APRA intends to consult on the proposed MySuper authorisation requirements in mid 2012. APRA also proposes to introduce a transitional prudential standard (SPS 410) for MySuper RSE licensees: see 2011 WTB 41 .
The amendments to the SIS Act will commence on 1 January 2013 or an earlier day fixed by Proclamation. However, RSE licensees will be authorised to offer a MySuper product from only 1 July 2013.
The SGAA amendments will commence on 1 October 2013, from which date the MySuper payment obligations will apply to employers.
Previously, exposure draft legislation setting out the proposed core provisions for MySuper products was released on 29 September 2011: see an earlier ClearLaw article here. The final Bill is substantially the same as the exposure draft legislation but has been revised in a number of subtle respects — for example, the final Bill allows for the payment of disability pensions.
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 Proposed s 29TC of the SIS Act.
 Proposed s 29TC(1)(i).
 Proposed s 29VA of the SIS Act.
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Prior to joining Maddocks, Andrew was a tax consultant at a Big 4 Chartered Accounting Firm.
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