Keep Up to Date with Changes Relating to Employees and Their Choice of Superannuation Fund

It is important for business owners to keep up to date with changes regarding employees and their superannuation contributions. The law relating to employees and their choice of superannuation fund changed from the 1st of January 2021. From this date onwards for new workplace determinations and enterprise agreements, employees have the right to choose which superannuation fund their compulsory super contributions are paid into.

Read below for more information regarding the changes relating to employees and their choice of superannuation fund including:

  • What is an enterprise agreement?
  • What does an employer have to do once a new determination or agreement is in place?
  • How do employees nominate their choice of superannuation fund?

WHAT IS AN ENTERPRISE AGREEMENT?

An enterprise agreement is between one or more national system employers and their employees, as specified in the agreement. Enterprise agreements are negotiated by the parties through collective bargaining in good faith, primarily at the enterprise level. Under the Fair Work Act 2009, an enterprise can mean any kind of business, activity, project or undertaking.

There are different types of enterprise agreements and terms regarding must be and can’t be included. For more information refer to this link.

WHAT DOES AN EMPLOYER NEED TO DO ONCE A NEW DETERMINATION OR AGREEMENT IS IN PLACE?

Once a new determination or agreement is in place, an employer needs to give the option of choosing the superannuation fund their contributions are paid to, to all new employees and any existing employees who ask to choose their superannuation fund. For employees who don’t nominate a superannuation fund, their employer can continue to pay their superannuation contributions to the existing fund contributions are made or into a default fund. Any restrictions placed on employees’ choice of superannuation fund in enterprise agreements made on or after 1st January 2021 are not enforceable.

HOW DO EMPLOYEES NOMINATE THEIR CHOICE OF SUPERANNUATION FUND?

There are 2 options for an employee to nominate their choice of superannuation fund. The employee can complete the standard choice form which can be found by the employee logging into their myGov account and accessing the ATO online services. The other option is for employers to provide the employee a Superannuation Standard Choice form. This form is for use by both employees and their employer. Employers must fill in the details of the businesses default superannuation fund before giving to an employee. The employee will then complete the form, providing all information requested, to advise their employer their choice of superannuation fund. Failure to pay superannuation into an employee’s choice of superannuation fund may result in employers having to pay superannuation charges.

It’s important to note this change is regarding agreements made at an enterprise level between employers and employees and their union, about the terms and conditions of employment. It is not to be confused with the legislation implemented on the 1st of July 2005, where the primary objective was to make it law to give employees the right to choose which superannuation fund will receive their employer superannuation contributions.

NEED HELP WITH THE BOOKKEEPING SIDE OF YOUR EMPLOYEE’S SUPERANNUATION CONTRIBUTIONS? BOOKKEEPING MATTERS CAN HELP.

Bookkeeping Matters work across all industries, including yours, to deliver orderly books and peace of mind, knowing your financials are under control. Years of experience has taught us what’s important to small and medium sized businesses. We use this insight to deliver flexible, efficient, tailor-made solutions to businesses like yours, right across Australia.

We are ready to get to work and help with your bookkeeping needs.

Call June at Bookkeeping Matters today on 0423 003 552.

Sources: ATO – Employees now have more super choice

Fair Work Australia  – Enterprise bargaining

The Institute of Certified Bookkeepers Client e-brief April 2021

Disclaimer: The information in this article is general information only. Bookkeeping Matters can assist businesses to adopt and implement changes for employees however, we do not interpret awards. We strongly advise business owners to refer to their Industry Award at all times. Bookkeeping Matters subscribes to an advisory service with Employment Innovations for assistance with client queries. Please refer to the Fair Work Ombudsman Website for specific Award advice. http://www.fairwork.gov.au/

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