Frequently asked questions
Question: As an employer what must I do ?
- Conduct an audit of your current employment contracts to ascertain who is eligible for choice.
- Determine what your company approach should be and who is to undertake this responsibility for implementation from 1 July 2005.
- Communicate with your staff as to how you are going to implement by way of staff meetings and or distribution of the required forms etc.
- Ensure you retain the Standard Choice form/s in your register to prove you have complied with the legislation.
Question: Does size of business count?
Answer: No, irrespective of whether you are a small, medium or large employer you must offer superannuation choice to your employees.
Question: Which employees are to be offered choice?
Answer: Those covered by common law contracts, (non award), those covered by Federal awards, and those covered by a Certified Agreement or AWA which has no specific clause dealing with superannuation contributions.
Question: Which employees are not offered choice?
Answer: Employees covered by state awards, AWA's or Certified Agreements with specific clauses dealing with superannuation contributions.
Question: What is required by the employer in offering choice to eligible employees?
Answer: All existing employees in employment from 1st July 2005 must be issued with a Standard Choice Form by no later than the 29th July 2005. Employees engaged post 1 July 2005 must be provided the choice form within 28 days of employment.
The company is obliged to commence payment into the nominated fund no later than within two months of the information provided on the standard choice form.
If an employee fails to nominate a fund what happens?
Answer: The employer can elect to make payments into an eligible complying superannuation fund - the default fund.
Question: How often can an employee elect to change his/her fund?
Answer: An employer is only required to implement choice for eligible employees once every 12 months. It is advisable to monitor your payroll records to ensure your employees are entitled to change funds.
What is required by the employee in nominating their particular fund?
Answer: The employee must provide:
- The full name of the fund including DIY funds
- The ABN number and Superannuation Product Identification Number
- Evidence that the fund is a complying fund - letter of certificate of compliance from the trustee and that it will accept employer contributions on behalf of the employee.
If the information above is not provided the employer may refuse to accept the fund and pay monies into the default fund until such time as the information is provided.
Question: Should I encourage my employees to elect the company default fund?
Answer: No, unless you are a qualified financial adviser do not advise your staff as you may be liable for damages in the event such fund performs badly compared to other funds.
Nevertheless you should take care to select an appropriate default fund.
Further information can be obtained by downloading:
Choice of superannuation information is also available from www.superchoice.gov.au or phone 13 28 64 or contact Printing Industries or Print Super in your State. Your accountant or financial advisor can also help you.
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