Stephanie Nuzzo* says superannuation changes are now coming into effect and explains how it will impact people and their retirement savings.
It’s a fresh financial year, people! That means a) it’s time to get your tax returns moving and b) superannuation is undergoing a big old change.
As you may already know, a handful of superannuation bills were recently passed changing the way super looks in this fresh new year.
Seeing as super is something that impacts all of us quite considerably, we figured it would be worth running through the biggest takeaways of these changes.
Here’s what you need to know.
YourSuper comparison tool is here
As of July 1, 2021, the ATO is now offering a superannuation fund comparison tool intended to help Aussies decide on which option suits them best.
The YourSuper tool displays a table of MySuper products (basic super options) ranked by fees and investment returns, with underperforming products clearly identified.
You can access a personalised experience with YourSuper by logging into the ATO online via the myGov service.
On this new tool, Minister for Superannuation, Financial Services and the Digital Economy Jane Hume said:
“We are making it easier for Australians to choose a better superannuation fund, with access to a new interactive online YourSuper comparison tool.
“The tool will make the performance of default MySuper products clear and comparable.
“These are funds that many thousands of Australians find themselves automatically signed up to, and now these funds will have to compete for the hard-earned retirement savings of Australians.
“Thanks to reforms from the Morrison Government you can login to the ATO through MyGov and with a few clicks check for lost super, consolidate accounts and even compare accounts to find a better deal.”
In the second phase of this rollout, slated for the end of September, Aussies will be alerted if their MySuper fund has been labelled as underperforming.
It’s worth noting, however, not all super fund options are MySuper products.
You can check to see if yours will be included here.
What are stapled superannuation accounts?
One of the most widely experienced annoyances with super is our tendency to accrue a number of different accounts with assorted providers (each of which has its own fees).
In an effort to counter this, it was announced in the 2021 Federal Budget that employees starting new jobs would no longer be automatically registered to a business’ preferred super fund if said employee fails to nominate an option.
Instead, employers will be required to contribute to the employees existing fund, therefore “stapling” people to their super funds.
This will kick off on November 1, 2021.
While it will reduce the risk of folks creating super, sticking with the same super fund throughout your entire working career may not work for you so be sure to do your research on what options are best for you, too.
The Super guarantee has increased
Another major shift being implemented as of July 1, 2021, is the 0.5 per cent increase to your super contributions by your employer.
Moving from 9.5 per cent to 10 per cent of your base salary, the change will obviously lead to larger sums being deposited into your superannuation account, which is lovely.
However, depending on the approach taken by your employer this 0.5 per cent may be included on top of your agreed salary, or it may be taken from your base salary – so it’s worth finding out how your paycheck will look going forward.
The ATO has some more details on 2021 super updates ready for you here.
If you’d like some more super reading, check out this write up on where your super ‘should’ be according to your age.
*Stephanie Nuzzo is the Editor of Lifehacker Australia. She writes on topics including diet culture, mental health, women’s issues and the confusing beast that is modern dating.
This article first appeared at lifehacker.com.au.
