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MySuper is part of the Stronger Super[1] reforms announced in September 2011 by the Gillard Labor government for the Australian superannuation industry to replace the previous default funds system with a new default system using low cost and simple superannuation products. MySuper compliant products may be provided by industry super funds, as well as retail super funds. Funds that do not operate as default funds, such as self managed superannuation funds (SMSFs) or choice products, are not subject to MySuper standards.

Since 1 January 2014, unless an employee has chosen another investment option, employers must pay all compulsory SG contributions into approved MySuper accounts, i.e., into super products that have received a MySuper authority. From that date, super funds must also credit employer contributions to a MySuper account, unless if the member has directed the trustee to do otherwise. Given that over 75% of employees stay with their employers’ default fund, it was expected that the majority of employees would be in a MySuper product from that date. Superannuation funds had until 1 July 2017 to move existing default members into a complying MySuper product. For convenience, many funds simply converted an existing default option to a MySuper account, so that members would be automatically included in a MySuper product.

Members can opt out of the MySuper option at any time, or may choose a particular MySuper product. They must be given a minimum of 90 days' notice before a default transfer to a MySuper account is made.

The intention of the MySuper system is for market participants to create a range of easily comparable, relatively simple products, which in turn will focus competition on net costs and returns. The Australian Prudential Regulation Authority (APRA) fosters competition by publishing fee tables and other statistics.[2]

Features of a MySuper account

The features of a MySuper product include:

  • a single investment option
  • a minimum level of insurance cover
  • an easily comparable fee structure, with a short prescribed list of allowable fee types
  • restrictions on how advice is provided and paid for, and
  • rules governing fund governance and transparency.[3]

MySuper investments

MySuper products are required to have a single investment option. Many funds, such as HESTA and CBUS, have announced that they will simply use their existing default investment option as their MySuper offering – typically Balanced or Growth.[4] An estimated 80% of not-for-profit funds will reportedly retain their existing products for MySuper.[5] This enables a simple transition to the MySuper regime. However, critics of this approach argue that offering a single investment option that doesn't change over an entire working life and into retirement does not reflect customers' changing attitudes to risk as they age nor as their retirement prospects change.

Lifecycle investment strategies

For these reasons, the government has allowed lifecycle investment options to be the default choice for a MySuper product. Lifecycle investment options enable trustees to automatically move members into a different investment mix based on their age and other permitted factors including balance, gender, time to retirement (or combination thereof), and can be particularly relevant as part of a transition to retirement.[6] Sunsuper was the first fund to receive approval for their lifecycle strategy.[7] However, a number of lifecycle strategies have since been released from companies including Aon, Suncorp, BT and First State.

MySuper fees

Fees a member can be charged in MySuper products are limited to:

  • administration fee
  • investment fee (including a performance-based fee)
  • buy and sell spreads (limited to cost recovery)
  • exit fee (limited to cost recovery), and
  • switching fee (limited to cost recovery).[6]

In addition, trustees may charge fees for certain member‑specific costs initiated by the member or a court; for example, account splitting following a family law decision.

All fees charged for MySuper products must be able to be included under these standard descriptions. This will make it simpler for members to understand what they pay and to compare fees against other MySuper products.

MySuper insurance

MySuper products are required to offer a standard, default level of life and total and permanent disability (TPD) insurance. Members of MySuper products are able to opt-out of the insurance, or increase or decrease their insurance cover (if offered by the trustee) without having to leave the MySuper product.

There may be particular factors at a workplace level that influence the appropriate level and structure of insurance for employees at that workplace. Therefore, within a MySuper product, it is possible for the standard insurance cover to be replaced by a default insurance strategy tailored to meet the specific requirements of the employees of a particular employer.[6]

MySuper timeline

21 September 2011 The Government announces its decisions on key design aspects of the Stronger Super reforms.
3 November 2011 1st tranche of MySuper legislation tabled in Parliament
16 February 2012 2nd tranche of MySuper legislation tabled in Parliament
19 September 2012 3rd tranche of MySuper legislation tabled in Parliament
29 November 2012 4th tranche of MySuper legislation tabled in Parliament
1 January 2013 First date for lodgements of MySuper applications
14 February 2013 Sunsuper is the first superannuation fund awarded a MySuper authority
28 June 2013 Final regulations released
1 July 2013 MySuper products can be launched
1 January 2014 Only authorised MySuper products can receive default super contributions from an employer
1 July 2017 Last date for superannuation funds to transfer existing balances of default members to a MySuper product

After 1 January 2014, members who do not make an investment choice, or who actively choose a fund's default option, must be invested in a compliant MySuper product.[8]

List of MySuper compliant products

On 14 February 2013, Sunsuper was the first superannuation fund to receive a MySuper authority.[9][7] On 20 February 2013, Cbus was the second fund to receive an authority.[10] A complete list of MySuper authorities is listed on the APRA website.[11] APRA had anticipates that fewer than 120 MySuper authorities would be granted in total by the mandatory start date of 1 January 2014, which has been revised down from earlier estimates.[12] As at 6 January 2014, 115 funds had been granted a MySuper authority:

  • AMG Universal Super – AMG MySuper (Public Offer)
  • AMP Retirement Trust – AMP MySuper No.1 (Public Offer)
  • AMP Superannuation Savings Trust – AMP MySuper No.2 (Public Offer)
  • AMP Superannuation Savings Trust – Brookfield Australia MySuper (Public Offer)
  • AMP Superannuation Savings Trust – CCA MySuper (Public Offer)
  • AMP Superannuation Savings Trust – Macquarie Group MySuper (Public Offer)
  • AMP Superannuation Savings Trust – Woolworths Group MySuper (Public Offer)
  • AMP Superannuation Savings Trust – Anglican National MySuper (Public Offer)
  • AMP Superannuation Savings Trust – Australia Post MySuper (Public Offer)
  • AMP Superannuation Savings Trust – AFLPA & AFL Industry MySuper (Public Offer)
  • ANZ Australian Staff Superannuation Scheme – ANZ Staff MySuper (Non Public Offer)
  • AON Master Trust – Aon MySuper (Public Offer)
  • ASGARD Independence Plan Division Two – Asgard Employee MySuper (Public Offer)
  • Auscoal Superannuation Fund – AUSCOAL Default Lifecycle (Public Offer)
  • Australian Catholic Superannuation and Retirement Fund – MySuper Balanced (Public Offer)
  • Australian Ethical Retail Superannuation Fund – Balanced (accumulation) (Public Offer)
  • Australian Meat Industry Superannuation Trust – AMIST MySuper (Public Offer)
  • AustralianSuper – Balanced (Public Offer)
  • AustralianSuper – IBM Superannuation Plan (Non Public Offer)
  • AustralianSuper – Komatsu Superannuation Plan (Public Offer)
  • Austsafe Superannuation Fund – MySuper (Balanced) (Public Offer)
  • AvSuper Fund – AvSuper Growth (MySuper) (Public Offer)
  • Bendigo SmartStart Super (Bendigo MySuper) (Public Offer)
  • Betros Bros Superannuation Fund No 2 – Betros MySuper (Non Public Offer)
  • BHP Billiton Superannuation Fund – MySuper Default Option (Non Public Offer)
  • Boc Gases Superannuation Fund – BOC MySuper (Non Public Offer)
  • Building Unions Superannuation Scheme (Queensland) – BUSSQ MySuper (Public Offer)
  • Caresuper – CareSuper (Public Offer)
  • Catholic Superannuation Fund – MyCatholicSuper (Public Offer)
  • Christian Super – My Ethical Super (Public Offer)
  • Club Plus Superannuation Scheme – Club Plus Super – MySuper (Public Offer)
  • Club Super – Club MySuper (Non Public Offer)
  • Colonial First State FirstChoice Superannuation Trust – Colonial First State FirstChoice Superannuation Trust (Public Offer)
  • Combined Fund – Combined Fund MySuper (Non Public Offer)
  • Commonwealth Bank Group Super – Accumulate Plus Mix 70 (Non Public Offer)
  • Commonwealth Essential Super – Commonwealth Essential Super (Public Offer)
  • Concept One The Industry Superannuation Fund – MySuper Balanced (Non Public Offer)
  • Construction & Building Unions Superannuation – Growth (Cbus MySuper) (Public Offer)
  • Duluxgroup Employees Superannuation Fund – Active Balanced (Public Offer)
  • Elphinstone Group Superannuation Fund – Balanced Option (Non Public Offer)
  • EmPlus Superannuation Fund – EmPlus MySuper (Public Offer)
  • Energy Industries Superannuation Scheme-Pool A – MySuper Balanced (Public Offer)
  • Energy Super – MySuper (Public Offer)
  • equipsuper – Equipsuper MySuper (Public Offer)
  • EquitySuper – MyEquitySuper (Public Offer)
  • First State Superannuation Scheme – First State Super MySuper Lifecycle (Public Offer)
  • First Super – First Super MySuper (Public Offer)
  • Goldman Sachs & JBWere Superannuation Fund – Goldman Sachs & JBWere Superannuation Fund – MySuper Product (Non Public Offer)
  • Guild Retirement Fund – Guild Retirement Fund (MySuper) (Public Offer)
  • Health Employees Superannuation Trust Australia – Core Pool (Public Offer)
  • Health Industry Plan – HIP MySuper (Non Public Offer)
  • HOSTPLUS Superannuation Fund – Balanced option (Public Offer)
  • IAG & NRMA Superannuation Plan – MySuper (Non Public Offer)
  • Incitec Pivot Employees Superannuation Fund – Active Balanced (Public Offer)
  • Intrust Super Fund – Intrust MySuper (Public Offer)
  • IOOF Portfolio Service Superannuation Fund – IOOF MySuper (Public Offer)
  • Kinetic Superannuation Fund – Kinetic Super – Growth (MySuper) (Public Offer)
  • Labour Union Co-Operative Retirement Fund – MySuper Balanced (Public Offer)
  • Law Employees Superannuation Fund – LESF MySuper (Public Offer)
  • legalsuper – MySuper Growth option (Public Offer)
  • Local Authorities Superannuation Fund – MySuper Balanced Growth (Non Public Offer)
  • Local Government Superannuation Scheme – LGsuper MySuper Lifecycle (Non Public Offer)
  • Local Government Superannuation Scheme – Pool A – MySuper Age-Based Investment Strategy (Public Offer)
  • Lutheran Super – Balanced Option – MySuper Compliant (Non Public Offer)
  • Maritime Super – Moderate investment option (Public Offer)
  • Meat Industry Employees Superannuation Fund – MIESF MySuper (Non Public Offer)
  • Media Super – Balanced investment option (accumulation) (Public Offer)
  • Mercer Super Trust – Mercer SmartPath (Public Offer)
  • Mercer Super Trust – Mercer WGSP MySuper (Public Offer)
  • Mercer Super Trust – Mercer Santos MySuper (Public Offer)
  • Mercy Super – MySuper (Non Public Offer)
  • MTAA Superannuation Fund – My AutoSuper (Public Offer)
  • National Australia Bank Group Superannuation Fund A – NABGSF MySuper (Non Public Offer)
  • Nationwide Superannuation Fund – NSF MySuper (Public Offer)
  • New South Wales Electrical Superannuation Scheme – NESS MySuper (Non Public Offer)
  • NGS Super – Diversified (MySuper) (Public Offer)
  • OnePath Masterfund – ANZ Smart Choice Super (Public Offer)
  • Perpetual's Select Superannuation Fund – Perpetual MySuper (Public Offer)
  • Plum Superannuation Fund – Plum MySuper (Public Offer)
  • Prime Superannuation Fund – MySuper (Public Offer)
  • Public Sector Superannuation Accumulation Plan – MySuper Balanced (Non Public Offer)
  • Qantas Superannuation Plan – Gateway (Non Public Offer)
  • Quadrant Superannuation Scheme – Quadrant MyChoices – MySuper Investment Option (Public Offer)
  • Queensland Independent Education & Care Superannuation Trust – QIEC MySuper (Non Public Offer)
  • Rei Super – Trustee Super Balanced Option (Non Public Offer)
  • Retail Employees Superannuation Trust – REST Super (Public Offer)
  • Retirement Wrap – BT Super for Life MySuper; BT Lifetime Employer MySuper (Public Offer)
  • Retirement Wrap – Westpac Group Plan MySuper (Public Offer)
  • Rio Tinto Staff Superannuation Fund – Rio Tinto Fund – Growth Option (Non Public Offer)
  • Russell Supersolution Master Trust – Russell MySuper (Public Offer)
  • Smartsave 'Member's Choice' Superannuation Master Plan – Smartsave MySuper Blanced (Public Offer)
  • State Public Sector Superannuation Scheme – QSuper Lifetime (Non Public Offer)
  • Statewide Superannuation Trust – StatewideSuper MySuper (Public Offer)
  • Suncorp Master Trust – Suncorp Lifestage Funds (Public Offer)
  • Sunsuper Superannuation Fund – Sunsuper for Life (Public Offer)
  • Super Directions Fund – AMP MySuper No.3 (Public Offer)
  • Tasplan Superannuation Fund – Tasplan MySuper (Public Offer)
  • Telstra Superannuation Scheme – Telstra Super MySuper (Public Offer)
  • The Allied Unions Superannuation Trust (Queensland) – My AUST(Q) Super (Non Public Offer)
  • The Bendigo Superannuation Plan – Bendigo MySuper (Public Offer)
  • The Executive Superannuation Fund – MySuper MyLife (Public Offer)
  • The Flexible Benefits Super Fund – FlexibleSuper Active Balanced (Non Public Offer)
  • The Transport Industry Superannuation Fund – TIS MySuper (Non Public Offer)
  • The Universal Super Scheme – MLC MySuper (Public Offer)
  • The Victorian independent schools Superannuation Fund – VISSF Balanced Option (Non Public Offer)
  • Toyota Australia Superannuation Plan – MySuper Growth (Non Public Offer)
  • Toyota Employees Superannuation Trust – MySuper Growth (Non Public Offer)
  • TWU Superannuation Fund – Balanced (MySuper) (Public Offer)
  • Unisuper – UniSuper Balanced (Non Public Offer)
  • United Technologies Corporation Retirement Plan – Balanced (Public Offer)
  • Victorian Superannuation Fund – Growth (MySuper) (Public Offer)
  • Virgin Superannuation – Virgin Super Essentials (Public Offer)
  • WA Local Government Superannuation Plan – MyWASuper (Public Offer)
  • Water Corporation Superannuation Plan – Growth Option (Non Public Offer)
  • Westpac Mastertrust – Superannuation Division – BT Business MySuper (Public Offer)
  • Worsley Alumina Superannuation Fund – MySuper WASF Default Option (Non Public Offer)

The URL www.mysuper.com.au is registered to OnePath Australia Limited.


Criticism of MySuper products

In 2019, Russell Mason of Deloitte argued that the introduction of MySuper products had ultimately been a waste of time, due to the fact that the majority of products were simply converted from existing fund options.[13]

References

  1. ^ Federal Government (1 July 2011). "Stronger Super Overview of Reforms". Retrieved 21 February 2013.
  2. ^ "Quarterly MySuper Statistics". Retrieved 7 October 2018.
  3. ^ APRA (12 January 2013). "Superannuation reforms 2011–2013". Retrieved 21 February 2013.
  4. ^ HESTA (19 March 2013). "HESTA's MySuper Option". Retrieved 19 March 2013.
  5. ^ Sampson, Annette (22 September 2012). "MySuper unleashes competition and value". Retrieved 8 April 2013.
  6. ^ a b c Treasury Department (19 March 2013). "Stronger Super". Retrieved 19 March 2013.
  7. ^ a b Davies, Justine (27 February 2013). "Spotlight on Sunsuper". Retrieved 19 March 2013.
  8. ^ ASFA (29 January 2013). "Super Reforms Timeline – MySuper". Retrieved 21 February 2013.
  9. ^ Shorten, Bill (14 February 2013). "Sunsuper awarded first MySuper authority". Retrieved 14 February 2013.
  10. ^ Smith, Mark (20 February 2013). "Cbus MySuper fund gets green light". Retrieved 21 February 2013.
  11. ^ APRA (21 March 2013). "APRA MySuper Authorities". Retrieved 21 March 2013.
  12. ^ AFR (21 March 2013). "APRA lowers MySuper forecast". Retrieved 21 March 2013.
  13. ^ "MySuper a costly distraction | Super Review". www.superreview.com.au. 15 August 2019. Retrieved 21 August 2019.
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