Treasury has published the Stronger Super Peak Consultative Group's report on how to best implement the Stronger Super package.
As part of the package, Treasury confirmed MySuper products would have a single, diversified investment strategy, but funds would be able to offer discounted administration fees to employees of particular employers, reflecting the administrative efficiencies for the fund in dealing with the employer.
Any discounted fee will be reported to the Australian Prudential Regulation Authority (APRA) and published by the fund. MySuper public offer funds will be able to be compared on fees.
In addition, funds will be able to offer employers with more than 500 employees a MySuper product tailored to the needs of the particular workplace, including the investment strategy, member services and fees.
The details of all separately tailored MySuper products will be required to be reported to APRA.
The government also announced its plans for automatic rollovers, and the process will see lost and inactive accounts with balances under $1000 and in eligible rollover funds consolidated into the member's current active account, unless the member opts out.
This reform would reduce the amount of fees paid on multiple accounts and maximise retirement benefits, the government said.
"A 30-year-old worker on full-time average wages can expect up to $40,000 more in retirement when the Gillard government's Stronger Super reforms are implemented," Financial Services and Superannuation Minister Bill Shorten said.
"For such a person this could be broadly equivalent to a 1 percentage point increase in contributions."
Once fully implemented, the reforms could reduce the fees paid by members by up to 40 per cent, Shorten said.
"It's in the national interest to encourage Australians to save more for their retirement. But it's also fair the superannuation industry contributes to higher retirement savings through greater efficiency and lower fees," he said.
From October 2013, employers must make contributions for employees who had not chosen their fund to a MySuper product, he said.
"All new superannuation payments will be commission free," he said.
"By 1 July 2017, funds will need to transfer the existing default balances of members to a MySuper product.
"This will see the orderly transition of existing billions of retirement savings to a commission-free environment."
However, the government would consult further on a mechanism to allow for this period to be extended in certain limited circumstances, he said.
He said by 2017, the vast majority of super balances would be commission free.
The government also said the SuperStream working group would continue work on the data and e-commerce standards, with a view to having the proposed contributions and rollovers data standards available in early 2012.
The data and e-commerce standards will be mandated for superannuation funds from 1 July 2013. The government will extend the data and e-commerce standards to large and medium-sized employers from 1 July 2014.
"I'm mindful of the implementation issues this raises for small employers. We'll continue to consult with employer groups on the feasibility of bringing small employers within this framework from 1 July 2015," Shorten said.
"I expect the exposure draft legislation on the core elements of MySuper will be released in the next few weeks."
