Treasury received 66 public submissions in response to the consultation paper. In addition to formal submissions, it held discussions with nearly 100 stakeholders, which included five roundtables, 23 bilateral meetings, and three technical working group meetings.

The YFYS measures involve four key elements designed to improve the superannuation system, including the performance test, YourSuper comparison tool, stapling, and best financial interests duty (BFID).

Last week, the government released the outcomes of the review and announced the next steps it is considering taking to ensure the best interests of members are met.

Assistant Treasurer Stephen Jones said feedback from stakeholders was primarily focused on the annual superannuation performance test, which is intended to hold trustees to account to maximise returns to members. Responding to this feedback forms the first part of the government’s response to the review.

He said the government would address several unintended consequences of the test identified in the review while maintaining the test’s integrity.

Updates to the performance test are outlined in exposure draft regulations and include prospectively increasing the testing period from eight to 10 years to encourage longer‑term investment decisions.

The draft legislation also said there would be changes to calibrating key benchmarks to ensure that funds are not unintentionally discouraged from investing in certain assets and adjustments to the notification letter that trustees of failed products send to members.

Additionally, there will be minor changes to improve accuracy and reduce administrative burden for APRA; and changes to ensure the test is fit‑for‑purpose when it is extended to trustee‑directed products (TDPs) this year.

In more detail, the government outlined in the draft legislation that the performance test will be fine‑tuned with updates to the benchmarks that can be implemented within the time frame for the 2023 testing period.

It stated the lookback period would also be progressively extended from eight to 10 years, which will help to reduce short‑termism and support investments that can generate strong returns for members over a longer time period.

The government will give further consideration to other changes that may be necessary to improve fund performance.

The performance test will also be extended to TDPs for the 2023 testing period, and any changes to the YourSuper comparison tool should take this extension of the performance test into account.

The consultation revealed there were concerns with implementation of stapling systems, legal framework and outcomes of stapling that are generating a significant administrative burden for employers that is leading some to bypass the stapling requirements.

The draft legislation stated the government is committed to stapling and will seek to address some of the significant issues in the current system to help meet the intent of stapling.

“The Australian Taxation Office (ATO) is anticipating that it will have an IT service for digital service providers available to adopt in April 2023, which should support a more streamlined service,” Mr Jones said.

“The ATO will also finalise improvements to its ‘Choice of Fund’ form in April 2023 to improve the onboarding experience for employers who use the ATO form.

“As this solution beds down, the government will continue to explore options that could support an improved experience and outcome from stapling.”

Mr Jones said the review also uncovered inappropriate behaviour where software providers are not only undermining stapling but also directing employees towards products that are associated with the software provider.

“This behaviour should cease voluntarily. If it does not cease, then the government will explore changes to law or regulation to prevent it [from] continuing,” he said.

Finally, the review found no concerns with the best financial interest duty, and as such, it will not be changed.

“Ultimately, every dollar spent will have an impact on member fees, which in turn directly impacts the retirement savings of members,” Mr Jones said.

“Stakeholder uncertainty and concerns can likely be effectively addressed through further guidance from the regulator.”

Consultation on the draft regulations is open until 2 May 2023, and updates will be implemented prior to the August 2023 performance test.

The review also heard feedback on the other measures of the Your Future, Your Super laws, including stapling. The government is committed to stapling, the eradication of unintended duplicate accounts, and will work with Treasury, the regulators and stakeholders to deliver on its goal.