Announcing the draft legislation in a statement, Assistant Treasurer Kelly O’Dwyer said the changes will lay the foundation for a stronger super system.
“The changes will ensure that Australians are able to better understand and compare the performance of superannuation funds across the industry, to see where their funds are invested and have greater ability to switch funds, if they choose to do so,” Ms O’Dwyer said.
The draft legislation will enable employees covered under enterprise agreements or workplace determinations that are made from 1 July 2016 to choose their own fund. According to the statement, this will extend choice to up to 40 per cent of the estimated two million employees who do not currently have choice of fund.
“It doesn't make sense to force employees to save money in superannuation, but then leave key decisions about how it is managed outside their control.
“The draft legislation also implements the government's election commitment to improve the quality of information available to super fund members and employers so that they can make informed decisions when comparing the relative performance of funds,” she said.
In a statement issued by the Treasury, it was stated that legislative frameworks for product dashboards and portfolio holdings will be established.
This will require super funds to develop product dashboards for their top 10 (by value) superannuation choice investment options and to disclose investments made both directly and through associated entities.
“It doesn't make sense to force employees to save money in superannuation, but then leave key decisions about how it is managed outside their control,” said Ms O’Dwyer.
The government is seeking to introduce legislation in 2016 with regulations being made after Royal Assent. The exposure draft is available for comment until 20 January 2016.
