‘Your Future, Your Super’ - what does it mean?

The Your Future, Your Super reforms (YFYS Reforms) were passed in June 2021. The YFYS Reforms aim to make the super system better for members in four key ways:

  • Stapling – preventing the creation of multiple unintended super accounts;
  • YourSuper – empowering members by making it easier to compare products through a new Government comparison website called ‘YourSuper’;
  • Performance test – holding funds to account for product performance through an annual performance test conducted by the Australian Prudential Regulation Authority (APRA);
  • Best Financial Interests – increasing transparency and accountability for how super funds use members’ savings.

We have created a new webpage which provides additional detail on the YFYS Reforms and questions you may have. This webpage is available to you at www.mlc.com.au/yfys

Now, let’s explain the YFYS Reforms and what they might mean for you.

Stapling

Stapling has been designed to help prevent the creation of multiple unintended super accounts. It means that a new super account won’t automatically be created every time you start a new job, helping you avoid multiple accounts with fees, insurance arrangements and insurance premiums.

Stapling means that your super follows you. You can start a new job knowing your employer and the Australian Tax Office (ATO) will ensure your super contributions will be paid into your ‘stapled’ account.

Stapling does not impact your ability to change funds at any time.

What stapling means for you

Stapling means you will keep your existing super account if you change jobs, unless you decide to change where your super is invested. This makes it easier for you and removes potential hassles associated with having unintended multiple super funds.  

Just as importantly, it means you won’t unintentionally accrue multiple insurance policies and associated insurance premiums (with each super fund you’re in).

YourSuper comparison tool

As part of the YFYS Reforms the Government has launched a comparison website called ‘YourSuper’ to make it easier for members to compare product performance. YourSuper is provided by the ATO and accessible from MyGov. The Government says this tool “is focused on providing members with simple, clear and trusted information about their retirement savings”1.

What YourSuper means for you

The YourSuper comparison website went live on 1 July 2021. It has some helpful features – you can access a personalised version via MyGov featuring your super balance and age. Alternatively if you don’t access via MyGov, the generic version will enable you to see how MySuper products have performed based on a nominal $50,000 investment. YourSuper includes information on product performance and fees.

For further information on YourSuper and how the MLC MySuper product will be represented on YourSuper, please refer to our online hub.

Performance Test

APRA will assess the performance of specified products within the super fund on an annual basis. The assessment is based on comparing a product’s net investment returns (including fees and taxes) with a benchmark return and fees. The results of the annual performance test will be reflected on the YourSuper website from 1 September each year. The results will be expressed as ‘performing’, ‘underperforming’ or ‘not assessed’. For the 2021 year, only MySuper products are subject to the annual performance test, and from 2022 other superannuation products and specified investment options will be included.

What the Performance Test means for you

Whilst performance has always been in focus, super funds are now on notice to ensure they are providing the best value for their members, aiming to protect members from poor outcomes.

MLC MySuper performance

For the 2021 performance test APRA has rated MLC’s MySuper product as ‘performing’.

For the year ended 30 June 2021, MLC’s MySuper Growth portfolio delivered strong investment returns, achieving a return of 20.3% (All returns are net of investment fees and tax considerations and do not include administration fees and costs).  The strong performance of MLC’s MySuper Growth portfolio has resulted in the product being ranked highly by independent research houses, such as:

  • ChantWest2 which ranked MySuper Growth portfolio as the 6th highest performing MySuper option for the year ended 30 June 2021;
  • SuperRatings3 which assessed MySuper Growth portfolio as the 7th highest performing MySuper option (out of 50) within the SR50 MySuper for the year ended 30 June 2021; and
  • SuperRatings4 which noted the MLC MySuper product “has exceeded its investment objective and achieved strong peer relative performance when compared to other MySuper options since the changes were made to our investment strategy from March 2019.”

For more information on MLC’s MySuper performance click here.

Best Financial Interests

The Best Financial Interest requirements are designed to “sharpen the focus” of super trustees, ensuring decisions, such as those on expenses, are in the best financial interests of members. There are also additional requirements for Trustees to make additional information available to members as part of the Annual Member Meeting.

Better informed, more engaged

The YFYS Reforms assist in improving performance and transparency within the super sector.

The Government’s own analysis suggests the YFYS Reforms will have a number of benefits for members. As noted above the YFYS Reforms make it easier for members to engage with their super savings and make better decisions5. As always, keeping a close eye on your super – and getting expert advice from someone who understands your unique retirement plans – is invaluable.

1 https://treasury.gov.au/sites/default/files/2020-10/p2020-super_0.pdf
2 ChantWest, Multi-Manager Survey June 2021, 13 August 2021, MySuper Growth net returns for period to 30 June 2021, page 11
3 SuperRatings, Fund Crediting Rate Survey June 2021, MySuper Growth net returns for period to 30 June 2021, page 20
4 NULIS analysis based on SuperRatings, Fund Crediting Rate Survey March 2019 to June 2021
5 https://treasury.gov.au/sites/default/files/2020-10/p2020-super_0.pdf

Important information

This communication has been prepared by NULIS Nominees Australia Limited ('NULIS') ABN 80 008 515 633 AFSL 236465, as trustee of the MLC Super Fund. This information is current as at 1 September 2021 and may be subject to change. NULIS is part of the group of companies comprising IOOF Holdings Ltd (IOOF) ABN 49 100 103 722 and its related bodies corporate (‘IOOF Group’). This information may constitute general advice. The information contained in this communication is general in nature and does not take into account personal objectives, financial situation or needs and because of that you should, before acting on the advice, consider the appropriateness of the advice having regard to your personal objectives, financial situation and needs, plus consider the relevant Product Disclosure Statement. You should consider obtaining financial advice tailored to your own personal circumstances. Opinions constitute our judgement at the time of issue and are subject to change. Neither NULIS nor any member of the IOOF Group accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in the information in this communication. Returns are not guaranteed and past performance is not a reliable indicator of future performance. The value of an investment may rise or fall with the changes in the market.