Employers - are you aware of the changes to Superannuation to come into effect in 2005 ?
Employer’s will be required to provide employees with a 'standard choice form', asking the employee to nominate their preferred superannuation fund. The employer is then required to make the employee's future superannuation contributions into the fund nominated by the employee.
The nominated fund must be ;
- an 'eligible choice fund'
- must be a complying fund
- able to accept the employers contributions.
If the employer fails to make the superannuation payments into the fund nominated by the employee, the employer will be liable for a financial penalty. If an employee has choice and does not exercise it, default arrangements will apply.
The new requirements apply to employers and employees covered by Federal Awards and those who are Award-free.
The new requirements do not apply to:
- employers and their employees where superannuation contributions are made in accordance with the terms of a certified industrial agreement under the Industrial Relations Act 1988, or an Australian Workplace Agreement under the Workplace Relations Act 1996 (ie an employer whose employees are covered by such an agreement which contains a superannuation clause directing where contributions are to be paid, does not have to offer individual choice to their employees);
- employers and their employees where superannuation contributions are made in accordance with the terms of a State industrial award
- public sector employees
- some defined benefit fund members
- people for whom contributions are made under a prescribed law.
The legislation does not fully explain how the choice process will operate, and in particular the details that must be included on the "standard choice form". This and other important pieces of information will be included in regulations which are expected to be releases shortly.
Please contact this office for more information.