MySuper through the Senate

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MySuper through the Senate

The Senate last night passed the MySuper Bill, providing a ‘simple, low-cost default superannuation product’, according to Superannuation Minister Bill Shorten.

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The Senate last night passed the MySuper Bill, providing a ‘simple, low-cost default superannuation product’, according to Superannuation Minister Bill Shorten.

‘Australia’s superannuation savings pool stands at $1.46 trillion and grew 13 per cent over the year to September 2012. You hear a lot of doom and gloom, but the fact our retirement savings grew at a double-digit rate should give Australians confidence,’ Mr Shorten said.

The Federal Government’s MySuper reforms will put downwards pressure on fees and is a significant step towards enhancing the arrangements for worker’s retirement savings.

The Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 establishes the core framework for MySuper products, which will replace existing default investment options in superannuation funds from 1 July 2013.

‘The first two tranches of MySuper legislation have now passed the Senate. We will work constructively with the Opposition, Greens and cross-bench to ensure the remaining two tranches are passed as soon as possible.’ Mr Shorten said.

According to the Minister’s media release, MySuper products will provide a default superannuation product that all Australians can rely on. It will be limited to a common set of features to make it easier for members, employers and other stakeholders to compare performance across MySuper products, putting downwards pressure on fees.

Better reporting
 
A number of the government’s other superannuation reform Bills passed the Senate yesterday, including a Bill that sets up the systems to provide for better standards for superannuation transactions.

Schedule 4 of the Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill 2012 aims to improve the quality of information in the superannuation system, and facilitate fully effective electronic processing of transactions.

The Bill allows the Commissioner of Taxation to provide two key services:
  • a central register, containing accurate and secure details of superannuation funds, which is critical to conducting electronic transactions
  • a tax file number validation service, which can be used by employers and trustees to ensure the information they hold for their employees and members is correct.
‘It has been estimated that the Australian superannuation industry processes more than 100 million transactions annually. The potential gains to the system from the effective electronic processing of transactions in superannuation are significant,’ Minister Shorten said.

Currently, poor member information quality leads to difficulties in allocating contributions, unnecessary duplicate accounts and a large amount of lost and unclaimed superannuation.
 
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