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MySuper: Optimising Australian superannuation

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The Panel has decided to rename the ‘universal’ part of the choice architecture model outlined in its 14 December 2009 preliminary report as: ‘MySuper’.

MySuper is predicated on providing a simple, cost‑effective product with a diversified portfolio of investments for the vast majority of Australian workers (shown to be above 80 per cent of members) who are invested in the default option in their current fund.  A significant portion of these members have not exercised choice in being where they are, but there are some members who have actively chosen the default investment option as their ‘investment of choice’.  The Panel has chosen to include both these groups of members in the scope of MySuper. 

MySuper may be viewed as a new type of product, but it is really a re‑focusing on the principle that occupational/compulsory superannuation should work well for those members who elect not to exercise choice or have chosen the trustee default investment option.  ‘Choice’ products remain as a vital component of the superannuation sector, but are excluded from the specific rules proposed for MySuper. 

MySuper is designed to cater to the large number of Australians who would prefer to delegate the task of designing and maintaining an investment strategy for their super to someone else.  In summary, it is a product with a single, diversified investment strategy designed to suit members as a whole.  It is a value-oriented superannuation offering.  The Panel’s SuperStream proposals will complement MySuper, further driving down overall costs. 

It will be readily apparent that MySuper is similar in some ways to the default investment options offered by many superannuation funds today.  Indeed, MySuper has been designed to sit comfortably within the existing structures currently offered by many superannuation funds.  However, some features of the default options of many funds are inconsistent with MySuper. 

For that reason, MySuper includes a range of additional regulatory requirements that are designed to ensure that the trustee is truly accountable to members, that the trustee is unfettered in its pursuit of the best interests of members and that the costs of delivering MySuper are contained.  Together, these safeguards are designed to emphasise the ‘trusteeship’ that MySuper members ought to expect from their product providers.  They also ensure that members do not inadvertently pay for services they either do not want or do not know about. 

Lastly, it is worth emphasising that MySuper has nothing to do with establishing a single national default fund and the Panel is not proposing to recommend one.