With only three months to go until the Australian Governments proposed reforms are anticipated to begin, retail industry superannuation fund Rest is urging business owners and employers to familiarise themselves with the proposed changes so that they can understand how the shifts might impact their business and employees.
Expected to take effect 1 July, the reforms will see changes to the way employers pay super contributions to their new starters. The earliest the legislation can pass parliament is mid-May, meaning there could be, at most, seven weeks to adapt to the changes, or as little as one week.
“Given the tight timeframe, it’s critical that businesses take steps now to understand the proposal and closely follow the progress of this bill so that they can pivot quickly once they have a clear set of new requirements,” said Deborah Potts, Rest Group Executive of Employer and Industry Engagement.
Under the proposal, named The Treasury Laws Amendment (Your Future, Your Super) Bill 2021, employers will be required to find a new starter’s existing super account and pay contributions into it unless the employee nominates a different account.
It’s common for new team members to join a company without nominating a super fund. When this happens, the employer will be required to contact ATO Online and request information about the employee’s existing super fund and pay contributions into that account.
The exact details of the ATO process, and how the ATO will determine the appropriate account if the employee already has multiple accounts, are not yet available.
If the ATO indicates the employee has no existing super fund (for example, they’re commencing their first job), and the employee hasn’t nominated a fund, then the employer can create a new account with the default super fund named in their workplace agreement or award.
Should the legislation pass in its current form, the new requirements will apply for new employees who commence employment from 1 July 2021.
Rest Group executive of employer & industry engagement Deborah Potts said: “Your Future, Your Super includes some welcome reforms to prevent the creation of unintended multiple super accounts. But, it also places significant new requirements on employers, and many may not be aware of them, given the tight timeframe, we’re encouraging businesses to take steps now to understand the proposal and closely follow the progress of this bill so they can act quickly once they have clear set of new requirements.”
To help employers stay ahead of the changes Rest have created a dedicated information web page for the Your Future, Your Super legislation, which will continue to be updated as more information comes to hand.
Employers are also welcomed to contact the fund with questions.
