A raft of changes to Australia’s superannuation system that passed Federal Parliament on Thursday (June 17) will require a change in payroll practices for employers.
*Editor’s note: Updated September 1.
From November 1, employees will be “stapled” to a superannuation fund that follows them from job to job.
This means that when an employee commences a new job and does not nominate a super fund, businesses are required to make contributions to an existing super fund.
If it is their first job and they do not nominate a super fund or existing account, the employer can pay contributions into the business’ default fund.
The reforms are aimed at reducing the amount of people with duplicate funds and is expected to save Australian workers $17.9 billion over 10 years.
CCIWA Principal Workplace Relations Advocate Paul Moss said the stapling of funds may initially create an additional administrative burden for employers.
“What the stapling does is intro an intermediate role … if the employee doesn’t nominate their fund, the employer will need to go to contact the ATO to determine whether or not the employee has a stapled fund to them, and if they do then they’ll pay into that,” he explained.
“Initially this will be a manual process, with the ATO expected to introduce an automated system in 2022”.
Employees will still be able to choose which fund their contributions are paid into and switch from an existing to a new fund.
Additionally, a new comparison website will be established, which ranks super funds by fees and investment returns.
Superannuation funds will also need to meet an annual performance test. Funds that fail will need to inform members and funds that consistently underperform will not be able to take on new members.
Federal Financial Services Member Jane Hume described the changes as the biggest reforms since compulsory superannuation was introduced in 1992.
To access the Super comparison tool, visit the ATO’s page.
CCIWA is here to help your business. For advice on managing your employees contact CCIWA’s Employee Relations Advice Centre on (08) 9365 7660 or [email protected].
