Starting a new job often means a tour of your new workplace, some awkward co-worker introductions, and digging out your superannuation details to fill out a complex set of paper forms. Upcoming changes to payroll requirements from the Australian Tax Office (ATO) could help to digitally streamline the superannuation selection process, though some industry bodies are concerned that important consumer protections could be overlooked.
According to the Australian Institute of Superannuation Trustees (AIST), the digitisation of superannuation paperwork should benefit both employees and employers, consolidating the available information to streamline the super selection process.
One notable potential benefit of digitisation is reducing the proliferation of multiple superannuation funds, with an estimated 45% of Australians having their super in more than one account. Using an online form rather than paper, employees could see a list of all their existing superannuation funds, as well as their employer’s default fund, and select where they want their superannuation to go. This could make it much easier for Australians to manage their retirement money, even if they don’t know all of their fund details.
However, AIST CEO, Eva Scheerlink, is concerned that the ATO may not offer an option to pre-fill the online form with the employer’s default fund, and that employees choosing their own funds could risk ending up worse off:
“With such a large number of consumers relying on the default fund selection process it’s important that they know where their retirement money is going.”
“We hope that the ATO will look for a genuine solution for naming the default fund in the online form that will result in more informed consumers.”
According to the AIST, strong super default funds are an important consumer protection, offering greater financial security for Australians who are less engaged with their finances and superannuation.