MySuper products are default superannuation products into which employers pay your compulsory SG contributions. But how does MySuper work?
- A MySuper product can be a stand-alone superannuation product or it can be offered as one of the choices contained in a regular super fund.
- Default superannuation guarantee (SG) employer-paid contributions can only be paid into a MySuper product or a fund that has a MySuper option.
- Under the new MySuper 'stapling' laws, if you're already a member of a super fund, your new employer must pay superannuation contributions into that fund.
Super choice has been operating in Australia since 2005, meaning that for many years now most employees have been free to choose which super fund they would like their employer paid contributions sent to.
But because not all employees have a preferred super fund, employers are required to have in place a default super fund for employees who haven't made a fund choice or who aren't interested in making one.
These default funds are normally chosen by the employer, often in consultation with their employees, or they can use the fund endorsed by their industry association or nominated in the industrial awards that sets their employment terms and conditions.
Because many of the nation's employees who use their employer's default super fund keep most of their superannuation in the fund's default investment option, the government has integrated MySuper into these workplace arrangements by stipulating that only MySuper products will be allowed to be default super funds that can accept superannuation guarantee contributions.
MySuper in practice
For the majority of employers and employees who use their default super fund's default investment option and who have that fund's standard insurance cover, MySuper will not impact them much at all. They will simply become a member of that fund's MySuper option, which in most cases was the default investment option they were already using anyway.
All the usual provisions of super fund choice also apply. Because MySuper products are in most cases a specially designated investment option within a regular super fund, they can also have their balance spread across the MySuper option and other investment options offered by the same super fund.
