The MySuper Bill was passed by the House of Representatives last week, with a last minute amendment introduced to protect consumers’ super savings and insurance entitlements after they leave an employer.
Speaking in Parliament late last week, Greens MP, Adam Bandt, moved that the MySuper legislation be amended so that members of a MySuper fund who leave their employer could not be transitioned to a new account without their consent, a process known as ‘flipping’. According to Mr Bandt, these new accounts often incur higher fees and have inferior insurance offerings.
“At the moment, there is nothing stopping the fund flipping them into a higher fee account without their knowledge, and this would mean that it is quite possible that a person, by the time they find out that their superannuation fund has been moved into a higher fee fund, may have lost several hundred dollars of their savings in fees,” Mr Bandt said.
“The amendments will stop that process happening without the employee’s consent. It will still be possible for the fund to switch them from one MySuper account to another, but it would need the employee’s consent first to do that.”
Mr Bandt’s amendments were passed without opposition from the Government or Coalition.
The other key change made to the MySuper legislation prior to the vote was to the date when employers would be required to contribute to a MySuper product on behalf of their employees. The amendment, which was passed, will extend this deadline from 1 October 2013 to 1 January 2014.
Bill Shorten, the Minister for Financial Services and Superannuation who introduced the amendment, said: “While funds will still be able to offer MySuper products from 1 July 2013, the amendment will provide an additional three-month transition before it becomes mandatory for relevant contributions to be made to a MySuper product. This will provide more time for funds and employers to prepare for MySuper, facilitating a smoother transition to the new order.”
