What is a “MySuper” product?

13 October 2011

Briefly, a “MySuper” product is merely a superannuation product which satisfies particular rules.  There is no need to establish a new super fund: a “MySuper” product could be issued from an existing super fund.

Neither super products currently issued by Industry Funds nor Retail Funds will qualify as a “MySuper” product.  Consequently, these funds will either have to convert their existing products to a “MySuper” product or issue an additional super product from the fund which will qualify as a “MySuper” product.

Generally, a trustee can only have one “MySuper” product per superannuation fund.  This “one product per fund” rule is subject to two exceptions.  A trustee could create a “MySuper” product for very large employers.  Such a product would be limited to the employees of that employer (and its associated entities).  The employer would have to have 500 or more employees participating in the product.  However, given the recent policy proposal to allow discounting of the administration fee, the 500 employee exception is unlikely to be used.  The second exception relates to “MySuper” products acquired by the trustee by reason of merger or takeover.

All types of super contributions can be made to a “MySuper” product and the product is not restricted to only employees.

However, a “MySuper” product is not a substitute for a retirement pension product.  A super investor who wishes to commence a pension (account-based or transition to retirement) will have to transfer to a choice product or an SMSF and then commence a pension.  An exception may apply where the pension is entirely provided from salary continue insurance.

Going forward, super products can be considered as consisting of four types:

  • A “MySuper” product  -  a super product which in general will be both passively acquired and to which SG contributions (the “9% compulsory contributions”) will be applied
  • A Choice product  -  a choice product is a super product which is not a “MySuper” product and is a product which has been actively chosen by a super investor
  • An SMSF product  -  a choice product where the investor has full control
  • Eligible Rollover Fund product  -  which is a home for any super benefits which cannot (usually because the investor cannot be contacted or makes no decision) be transferred to another “MySuper”, a choice product or an SMSF.
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