Legislation for the government's planned low-cost superannuation product, MySuper, has passed through the lower house following a number of amendments.
The House of Representatives passed the Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 late yesterday.
Under the amendments, the government has deferred the date from which it will be mandatory for employers to make employee contributions to a fund offering a MySuper product by three months, from 1 October 2013 to 1 January 2014.
"This additional three months will facilitate a smoother transition to the new regime for both employers and superannuation funds," Financial Services and Superannuation Minister Bill Shorten said in a statement.
The other government amendment would allow MySuper products that offered a life-cycle investment strategy to seek authorisation to charge a maximum of four different investment fees, Shorten said.
Previously, these products were limited to a single investment fee. This change will avoid cross-subsidisation between members in different stages of the life-cycle strategy.
"I acknowledge the support of the cross-bench and coalition for the government amendments," Shorten said.
The government will move to legislate the remaining MySuper measures as soon as possible.
The Industry Super Network (ISN) and Association of Superannuation Funds of Australia (ASFA) responded in favour of the passage of the bill.
ISN chief executive David Whiteley said the Greens' push for the inclusion of an "effective ban" on flipping should be applauded.
Flipping is a practice used by many retail super funds where employees changing jobs are transferred without their informed consent into higher cost retail super funds, often with inferior insurance, Whiteley said.
"Industry super funds have continued to be strong advocates for improvements to the compulsory super system to ensure it retains the confidence of members and employers," he said.
"Prohibiting flipping is another step in improving Australia's super system and in particular protecting disengaged members."
Legislation establishing a minimum standard for default superannuation accounts was an important step towards greater engagement for consumers, the peak superannuation body said.
ASFA chief executive Pauline Vamos said the passage of the first tranche of MySuper legislation through the House of Representatives was like a "heart tick".
"MySuper offers Australian workers a super account with defined fees, no commissions and a highly transparent investment approach," Vamos said.
"This is like the 'heart tick' on food: to be called MySuper, all ingredients must be disclosed and products must meet certain standards and be authorised by the Australian Prudential Regulation Authority.
"It is an indication to consumers that the product meets a host of demanding requirements set by government for default superannuation."
She said last-minute "tweaks" made by the government to the legislation were in response to suggestions made by ASFA.
"The legislation now makes it practical for funds to offer MySuper products which adjust the investment mix in line with the age of the fund member - so-called life-cycle investing," she said.
