As an employer, it can be challenging to keep up with all the news and legislative changes that may impact your business and employees. Here’s a quick overview of changes for the second quarter of this financial year.
Our regular super legislation updates are designed to help you stay in touch with recent legislative changes as well as general news for employers.
Changes to Australia’s super system
Legislation for the Your Future, Your Super reforms is now in force and includes:
- an annual performance test for super fund, from 1 July 2022,
- stronger requirements for trustees to act in the best financial interests of members, from 1 July 2022
- super stapling, where a single super account will follow an employee from job to job, from 1 November 2022, and
- introduction of a new super comparison tool to allow comparison of MySuper products, from 1 July 2022.
Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses Invest Bill
The Government has now introduced a Bill into parliament that, if passed, will legislate the Budget 2021 announcements relating to super:
- The removal of the $450 per month threshold to expand coverage of super guarantee to eligible employees regardless of their monthly pay, from 1 July 2022.
- Also, from 1 July 2022, the minimum age for the downsizer contribution will be lowered from 65 to 60, allowing eligible Australians to make a one-off contribution to super of up to $300,000 per person when they sell their family home.
- Changes to first home savers scheme mean that from 1 July 2022, eligible individuals will be able to release up to $50,000 (was $30,000) to assist with the purchase of their first home.'
From 1 July 2022, individuals who are between 67 to 74 years old will be able to make or receive non-concessional (including under the bring-forward rule) or salary sacrifice super contributions without meeting the work test subject to the existing contribution caps. The work test will continue to apply where an application for personal deductible contributions is made.LEARN MORE: VISIT aph.gov.au
Superannuation Guarantee rate increase
The legislated Super Guarantee increased to 10% started on 1 July 2021. From then, the rate is legislated to increase by half a percent each year until it reaches 12% in July 2025.
As Australians live longer and population growth slows, there’ll be fewer working people paying taxes, so an increase in the SG will take pressure off the broader government budget and the overall economy. Over time, this increase will positively impact the retirement outcomes of many Australians.
Changes to the work test and other key changes affecting members
Australians under the age of 67 (was previously 65) are now eligible to make voluntary super contributions without needing to meet the work test.
Other key changes from 1 July 2021 include:
- Extension of bring forward rule;
- COVID19 Re-contribution restrictions;
- Removal of Excess Contribution Charge
Contribution caps limiting how much individuals can add to super each year increased from 1 July 2021. The cap on concessional contributions rose from $25,000 p.a. to $27,500 p.a. while the cap on non-concessional contributions increased from $100,000 to $110,000 for the 2021–22 year (subject to a total super balance).
News from AustralianSuper
A change of leadership for AustralianSuper
AustralianSuper’s Chief Executive, Ian Silk, stepped down from leading the Fund at the end of September with Paul Schroder, previously the Fund’s Chief Risk Officer, taking over Fund leadership from October 1 this year. Mr Silk has led AustralianSuper since its formation 15 years ago. and is a respected leader at AustralianSuper. His expertise, passion and leadership have strengthened the Fund’s position and helped millions of members work towards achieving their best financial position in retirement.
New product design and distribution obligations
From 5 October 2021, new product Design and Distribution Obligations (DDO) require issuers and distributors of financial products, including super funds, to help customers and members obtain financial products that are appropriate for their objectives, financial situation, and needs. These obligations align with AustralianSuper’s goal to deliver top-performing, world-class products and services to our members.
A key component of the legislation is for financial service providers to publish a Target Market Determination (TMD) for each product covered by DDO. A TMD describes a product’s features and benefits, the intended target market, and how it’s distributed to consumers. It also includes the events or circumstances where we may need to review our products and the TMD. You can view AustralianSuper’s TMDs at australiansuper.com/tmd
A TMD isn’t intended as financial advice, and employers and their staff should refer to the relevant Product Disclosure Statement (PDS) for detailed product information
Moving to net zero
The effects of climate change on economies, companies and communities around the world has a flow-on effect to investments. To offset the risk of economic impact on investments, AustralianSuper has committed to achieving net zero carbon emissions in our investment portfolio by 2050. We’ll be transitioning away from high-carbon investments, like fossil fuels, toward renewable investments like wind and solar.
Member products and services
2021 Annual Member Meeting
The Annual Member Meeting (AMM) which this year took place on 4th November, provides members with the opportunity to receive an update from AustralianSuper’s Chair, Chief Executive and senior executives. Topics covered include Fund performance as well as an outlook for the year ahead.
Study shows retirement confidence is not just about money
A new study carried out by AustralianSuper and Monash University puts into question the weight given to super balances in determining how confident people feel in the lead up to retirement.
Education for members
AustralianSuper hosts regular live webinars on a range of topics to help members manage their super and get the most out of it. There’s also a library of recorded sessions members can watch any time.
* Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns. Returns from equivalent investment options of the ARF and STA super funds are used for periods before 1 July 2006.
This information may be general financial advice which doesn’t take into account your personal objectives, situation or needs. Before making a decision about AustralianSuper, you should think about your financial requirements and refer to the relevant Product Disclosure Statement. AustralianSuper Pty Ltd ABN 94 006 457 987, AFSL 233788, Trustee of AustralianSuper ABN 65 714 394 898.