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Employers to find existing Supers – Historically when a person starts a new job they often sign up to whatever Super fund the employer uses. This has meant people often “accumulate” Super funds, and this means extra FEES. It also often means multiple insurance policies, some of which (income protection) will not both pay out, so this really is money down the drain.
Approximately four and a half million of us have multiple Super accounts and studies suggest that cumulatively we are wasting nearly half a billion dollars in fees. According to the Productivity Commission by the time those people retire they may have $50,000 less than they would have.
From next year employers will be required to find the existing Super accounts for new employees and begin to pay into that, unless the employee specifically requests they pay into another. Such a law will also mean the Government has satisfied recommendation 3.5 of the 76 recommendations from the Royal Commission.
YourSuper – The Government also intends to introduce a new tool so that people can compare Super funds, with respect to their returns and their fees. Initially this will only include the MySuper funds, i.e. the low fee, default funds employers tend to use.
APRA to name and shame – APRA plans to benchmark Super funds each year and furthermore to identify which Super funds are underperforming compared to other funds. They will even force Super funds to contact their clients to inform them that they have underperformed! The plan is such that if the fund underperforms 2 years in a row, it will be banned from taking on new members Again this will start with the MySuper products but be extended beyond this from 2022.
Insurance – There are some that are concerned that if an employee does not take on the default Super with a new employee that they may not acquire the necessary insurances for the job. As such the Government is encouraging people to speak with their Super about what insurance they have with their Super and whether it is appropriate to them and their occupation. They are also seeking to simplify the industry, namely through introducing “universal” terms and exclusions to make them more user-friendly and easier to interpret.
If you would like your Super and/or Insurance policies reviewed call Hudson today on 1800 804 296 or submit a contact form here.