Your Future, Your Super reforms
In essence, the YFYS reforms:
• require employers to make contributions for employees commencing from 1 November 2021 to an employee's stapled fund, as distinct to an employer's default fund
• introduce a new annual performance test, which prohibits trustees from accepting new contributions for those products that underperform
for two consecutive years
• amend the best interests duty, such that trustees and directors are required to act in the 'best financial interests' of their beneficiaries
• remove an exemption for trustees regarding the disclosure of their portfolio holdings.
The purpose of this paper is to consider each of these reforms in greater detail.
Reducing the creation of multiple accounts
The YFYS Bill amends the 'choice of fund' rules in Part 3A of the Superannuation Guarantee (Administration) Act 1992 (SGAA). Previously, if an employee did not elect a superannuation fund into which an employer would pay their superannuation contributions within the relevant time period, an employer would be able to comply with the choice of fund rules by making contributions on behalf of the employee into the employer's chosen default fund.
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Should APRA publish every super fund's YFYS performance test score?