The Your Future, Your Super reforms have been passed. It’s critical that super fund trustees and providers take action now to prepare. Plan your response now with our simple checklist.
It's time to take action
Announced in the October 2020 Federal Budget, the Government’s Your Future, Your Super (YFYS) reforms have been passed. They apply in the most part from 1 July 2021 (stapling starts 1 November, 2021), although the associated Treasury Laws Amendment (Your Future, Your Super) Regulations 2021 have not yet been finalised and remain as an exposure draft.
The YFYS reforms are expected to significantly change the superannuation industry. Find out what this means for super fund trustees and providers - and how you can be better prepared for the changes.
The net return performance of products will be tested against a passive benchmark portfolio net return. If a product fails the Performance Test, trustees must notify members. Trustees cannot continue to accept new members into a product that fails the Performance Test in two consecutive years.
The Australian Taxation Office will provide a tool to make it easier for members to compare super fund product performance and fees, and to make it easier for them to join their selected fund.
The member best interests duty requirement is further refined to focus on best financial interest with a reverse onus of proof on trustees to demonstrate compliance with the modified duty on all decisions, without a materiality threshold.
Members will be ‘stapled’, that is they will remain with their existing superannuation fund when they move employers, unless they actively select a new fund – rather than being defaulted into their new employer’s fund.
Whether you are considering your approach or reviewing your strategy, our experts can help you stay ahead of legislative changes, manage key areas of risk, and ensure compliance with legislative requirements.
Tim Jenkins, FIAA
Senior Actuarial Consultant
Anthony Nemec
Head of Legal Consulting – Mercer
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