Treasurer Josh Frydenberg and financial services minister Jane Hume have encouraged citizens to get behind super reform changes that have come into effect this month, citing them as the “most significant in nearly 30 years”.
In a joint release, the Treasurer and financial services minister confirmed that from 1 November 2021 Australians will see their superannuation follow them when they change jobs.
“From 1 November 2021, where an employee has an existing superannuation account, that account will be ‘stapled’ and follow them when they change jobs,” the statement said.
“This means employers will now pay super contributions into their new employee’s existing super account unless the employee nominates a different account,” Josh Frydenberg and Jane Hume’s statement noted, adding that the changes “will end the creation of unintended multiple accounts every time individuals change jobs”.
The changes build on measures already introduced through Your Future, Your Super reforms and come off the back of recommendation 3.5 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Collectively, the reforms are estimated to save Australian workers $17.9 billion over 10 years, according to Mr Frydenberg and Ms Hume.
“Every year around 850,000 duplicate accounts are created. Treasury has estimated that stopping the creation of millions of unintended multiple accounts over the next decade will boost balances in super by about $2.8 billion by avoiding duplicate fees and lost returns,” they explained.
“Employers can find out more about their new obligations and how to comply at the ATO website.
“…Through these reforms, the Morrison Government is strengthening the superannuation system and making it work harder for all Australians by reducing waste and maximising retirement incomes.”
In June this year, CPA Australia and Chartered Accountants Australia and New Zealand criticised reforms to the government’s Your Future, Your Super scheme for offering consultation on the bill on late notice, failing to address issues with its underperformance test, and neglecting to offer a grace period to businesses that will need to transition to new processes.