Treasury Laws Amendment (Your Future, Your Super) Act 2021

Overview

The Treasury Laws Amendment (Your Future, Your Super) Act 2021, enacted by the Parliament of Australia on 22 June 2021, aims to amend the law relating to superannuation, addressing several issues within the existing superannuation framework. The Act is structured to introduce changes in three primary areas: the establishment of a single default superannuation account, measures to tackle underperformance in superannuation funds, and the imposition of a duty on trustees and directors to act in the best financial interests of beneficiaries. The Act's provisions are designed to enhance the efficiency and effectiveness of superannuation fund management, ensure better performance of funds, and protect the financial interests of superannuation beneficiaries.

Scope and Application

The Treasury Laws Amendment (Your Future, Your Super) Act 2021, referred to as the Act, amends the law relating to superannuation in Australia. The Act applies to entities, trustees, and directors of superannuation funds, as well as employers who are required to make superannuation contributions on behalf of their employees. The Act's amendments affect superannuation funds, including regulated superannuation funds, MySuper products, and other Part 6A products identified by regulations. The amendments apply to employment that starts on or after 1 November 2021 and to superannuation products from 1 July 2021 onwards, with some contingent amendments taking effect later. The Act primarily amends the Superannuation Guarantee (Administration) Act 1992, the Superannuation Industry (Supervision) Act 1993, and the Superannuation Act 1990, introducing new provisions and modifying existing ones. The Act does not specify any exclusions, exemptions, or thresholds within the provided text. However, the application of certain provisions may be contingent on other legislation, such as the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021 and the Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Act 2020.

Key Provisions

• The Treasury Laws Amendment (Your Future, Your Super) Act 2021 introduces a range of amendments to superannuation legislation. The Act modifies the Superannuation Guarantee (Administration) Act 1992, establishing a single default account for employees and altering the process for identifying stapled funds, which are funds that satisfy certain requirements prescribed by regulations. Employers are now required to request the Commissioner to identify any stapled fund for an employee, and the Commissioner must respond in writing with the necessary details for making contributions to that fund. The Act also introduces a mechanism for the Commissioner to reduce or eliminate an employer's individual superannuation guarantee shortfall if certain conditions are met regarding late contributions. In addition, it amends the Superannuation Industry (Supervision) Act 1993 to introduce annual performance assessments for superannuation funds, requiring the Australian Prudential Regulation Authority (APRA) to assess whether funds meet specified investment return requirements. If a fund fails to meet these requirements for two consecutive years, it is blocked from receiving new contributions from employers, except in certain circumstances.
• The Act imposes several obligations on the parties it governs. Employers must request the Commissioner to identify stapled funds for their employees and ensure contributions are made in compliance with the choice of fund requirements. Trustees of superannuation funds must comply with annual performance assessments and notify beneficiaries if their fund fails to meet the specified requirements. APRA is tasked with conducting these assessments and ensuring that descriptions of their contents are published on its website.
• Breach of the Act's provisions can result in both civil and criminal consequences. Trustees and directors of superannuation entities who fail to act in the best financial interests of beneficiaries can face civil proceedings, with a presumption that they did not act in the best interests unless evidence to the contrary is provided. Criminal penalties can apply if there is proof of dishonesty or intention in relation to a contravention of a covenant. Trustees and directors can also be subject to penalties of up to 50 penalty units for breaches of prescribed record-keeping standards. The Act includes provisions for the validity of transactions not being affected by contraventions of these standards.
• The Act's amendments primarily take effect from 1 July 2021 for MySuper products and from 1 July 2022 for other Part 6A products identified by regulations. Certain contingent amendments are dependent on other pieces of legislation, such as the Treasury Laws Amendment (Self Managed Superannuation Funds) Act 2021 and the Family Law Amendment (Western Australia De Facto Superannuation Splitting and Bankruptcy) Act 2020.

Legal classification tags

Area of Law

Superannuation Law

Instrument

Act

Concepts

Commencement Provisions

Repeal & Amendment

Civil Penalty Provisions

Reporting & Disclosure Obligations

Regulatory Standards