Lutheran Super MySuper update

29/07/2013

Stronger Super is one of the most significant parcels of reforms to the superannuation industry since the Superannuation Guarantee was first introduced more than 20 years ago. Since these reforms will impact your super in various ways both now and over the next couple of years, we want to be sure you have the information you need to stay up to date.

Based on recommendations from the Government's 2010 Super System Review, the Stronger Super reforms are designed to strengthen Australia's retirement system. As Australia faces the challenge of an aging population, superannuation will continue to play an increasingly critical role in providing financial security for Australian workers in their retirement.

We'll be providing ongoing updates to help you gain an understanding of how these reforms will affect your retirement savings in the future.

Here we've briefly outlined the key elements of Stronger Super:

MySuper is a key part of the reforms. It aims to be a low-cost, simple super product which replaces the Fund's current default investment option offered to members. In other words, for employees who do not select a fund and an investment option for their super account, their default option will be a MySuper product nominated by their employer or specified in an award or agreement. Employer contributions must be paid into a MySuper product from 1 January 2014 where an employee has not made a choice.

Lutheran Super's Trustee is applying for authorisation to offer a MySuper product and expects to offer a MySuper product to members from 1 January 2014.

Lutheran Super is a not-for-profit superannuation fund and has always been run only to benefit our members. The superannuation industry's move toward these new standards simply highlights the value for money our members already enjoy.

Parts of Lutheran Super's implementation of MySuper are still in development and we will continue to keep you informed over the coming months as details are confirmed.

SuperStream requires super funds and employers to use new online systems and software standards to improve the efficiency and accuracy of day-to-day super transactions. These new requirements aim to streamline administrative costs and processes including providing an easier way to identify and consolidate 'lost' super accounts.

There are increased governance requirements on fund trustees that are designed to strengthen the integrity of the superannuation system and ensure that trustees make prudent decisions that are in the best interests of their members.

Peripherally, changes to the Superannuation Guarantee (SG) rules paved the way for the first SG rate increase from 9% to 9.25% of ordinary time earnings (OTE) from 1 July 2013. The SG rate is legislated to rise each year to reach 12% of OTE by 1 July 2019. This may change, however, following the federal election later this year.

Finally, financial advice services have experienced a significant shake up through the Future of Financial Advice reforms (FoFA), the provisions of which will serve to better protect members' interests and increase access to low cost, simple financial advice and intra-fund financial advice in relation to superannuation. Under the new arrangements, contributions made to MySuper products must be free from commissions to financial advisors. Lutheran Super has never paid commissions to financial advisors or insurance companies.

This information has been prepared by Mercer Outsourcing (Australia) Pty Ltd (MOAPL) ABN 83 068 908 912, Australian Financial Services Licence #411980. Any advice contained in this document is of a general nature only, and does not take into account the personal needs and circumstances of any particular individual. Prior to acting on any information contained in this document, you need to take into account your own financial circumstances, consider the Product Disclosure Statement for any product you are considering, and seek professional advice from a licensed, or appropriately authorised, financial adviser if you are unsure of what action to take. "MERCER" is a registered trademark of Mercer (Australia) Pty Ltd ABN 32 005 315 917. Copyright 2013 Mercer LLC. All rights reserved.

 

LCA Nominees Pty Ltd ABN 61 008 204 939 AFS Licence #240571, as Trustee for Lutheran Super ABN 93 371 348 387.

This website is provided by Mercer Outsourcing (Australia) Pty Ltd (MOAPL) ABN 83 068 908 912, Australian Financial Services Licence #411980. The Trustee pays a fee for the provision of this service, however this fee is not conditional on you using this service or acting on the information or advice provided through this service.