What is MySuper
3.1 What is MySuper
MySuper is a government initiative designed to simplify the superannuation system. It is a default superannuation product offered by superannuation funds to provide a simple and low-cost option for individuals who do not actively choose a specific superannuation fund or investment option. Introduced 1n July 2013, as part of the Stronger Super reforms, the goal was to make superannuation easier to understand and compare, and to ensure that members' retirement savings were invested in a straightforward and cost-effective manner.
Standardised product - MySuper products have a standardized set of features and a simple investment strategy. They must meet certain criteria set by the government, such as a low-cost structure and a basic level of insurance coverage.
Default option - If an employee does not choose a specific superannuation fund, their employer must contribute their superannuation contributions into a MySuper product offered by the fund of their choice.
Investment strategy - MySuper products have a default investment strategy that aims to provide a balanced level of risk and return over the long term. The strategy is generally designed to suit most members' needs, taking into account their age and investment time horizon.
Transparency and disclosure - MySuper products must provide clear and concise information to members about fees, investment options, and performance.
Note that while MySuper is designed to be a simple and low-cost option, individuals can still select alternative superannuation funds that may better align with their personal financial goals and risk preferences.
APRA Performance test
From 1 July 2021, MySuper products are subject to an annual performance test. Any MySuper products that fail the new APRA-administered annual test twice in a row will not be allowed to receive any new members until they improve their performance.
This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.
Last modified: Wednesday, June 28, 2023