This article applies to all Australian organisations.
Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 (Cth)
Please be advised that the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 (Cth) (the Bill) passed its third reading on 25 August 2020 and received Royal Assent on 3 September 2020. The Bill came into operation the day after it received Assent.
Currently, under the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGAA), some employees do not have the right to choose their own superannuation fund where an employer makes contributions in accordance with an enterprise agreement or workplace determination.
The lack of choice of fund contributes to many employees having multiple superannuation accounts and paying multiple sets of fees and insurance premiums, which can reduce their retirement income.
In response to this, the Commonwealth Parliament has introduced the Bill to amend the SGAA in order to remove these restrictions and ensure employees under workplace determinations or enterprise agreements that do not allow for choice of superannuation fund have an opportunity to choose the superannuation fund for their compulsory employer contributions.
Extending choice of fund
Currently, employers can satisfy the choice of fund requirements under Part 3A of the SGAA by paying superannuation contributions to a fund in accordance with a workplace determination or enterprise agreement, leaving employees unable to choose their own superannuation fund where the relevant instrument does not allow for it (see section 32C(6) of the Act).
The Bill amends section 32C(6) so that it does not apply to an employee that is employed under a workplace determination or enterprise agreement that is made on or after 1 January 2021. This means that employees covered by a workplace determination or enterprise agreement made on or after that date will be able to choose their own superannuation fund.
Importantly, employees to whom such a determination or agreement applies must be provided with a standard choice form, and if they do not elect to choose their own fund, the default fund arrangements will apply.
It should be noted that workplace determinations and enterprise agreements made before 1 January 2021 remain subject to the previous choice of fund provisions.
Please click here to access the full Bill.
For further information please contact the Law Compliance team:
Phone: 1300 862 667