“MySuper” Changes

13/10/2011

The “MySuper” changes are the first tranche of the Stronger Super changes.  The first tranche (as set out in the Exposure Draft of the proposed legislation) deals with the details of the authorisation to issue a “MySuper” product and the product features applying to “MySuper” products.

The subsequent tranches of the “MySuper” legislation will impose heightened standards on trustees offering “MySuper” products. In particular, trustees of funds issuing a “MySuper” product will have to actively consider whether the product has sufficient scale to justify its continued existence and will have to set an investment return target (over a rolling 10 year period).  

Additionally, subsequent tranches will deal with issues in relation to “MySuper” products such as:

• The power of APRA to issue prudential standards
• Rules for the charging of financial advice including intra-fund advice
• Rules for the payment of performance-based fees by trustees to investment managers
• Limitation cost recovery by trustees
• Rules relating to the insurance cover
• Rules relating to the fair allocation of costs between “MySuper” products and choice products issued from the same super fund
• Specific disclosure requirements; and
• Specific amendments to the Corporations Act to ensure that “MySuper” obligations filter through corporate trustees to the directors.