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Super Outcomes Budget 2020 – “Your future, your super”

Retirement
COVID 19 Coronavirus

October 7, 2020

New performance test for superannuation products, new best interests and stapling of super accounts – Federal Budget 2020.

A new performance test for super products, new best interests obligations for trustees and the “stapling” of super accounts to employees are the Budget 2020 headline measures for superannuation.

In this issue of Super Outcomes, you can read our analysis of and commentary on all the key announcements. Here is a very brief overview:

Stapling of accounts

Over time this measure will help reduce costly and unwanted multiple accounts. However, there are a number of matters that need to be clarified.

YourSuper comparison tool

As a new government-provided tool this will carry particular weight among superannuation members but there is a risk that the focus on fees and past returns could create the impression that these are the only factors that should be considered in choosing a fund for future contributions.

Annual performance test

A significant change to the landscape commencing from 1 July 2021. While the positive effect of this measure may be to reduce the number of underperforming funds, it has the potential to encourage herd behaviour.

New best interests duty

From 1 July 2021, trustees will be required to comply with a new duty to act in the best financial interests of members and the onus on demonstrating compliance with the new duty will be reversed.

Increased disclosure for Annual Member Meetings

Trustees will be required to provide members with key information regarding how they manage and spend their money in advance of Annual Member Meetings.

Other super announcements

There were also a number of previously announced changes restated in the Budget papers. These are included as a handy reference in our full Super Outcomes.

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