This follows from an announcement by the Minister for Small Business, Bruce Billson, in November 2014 to “further reduce superannuation red tape by removing the obligation on business to offer employees choice of fund when it does not make sense to do so.”
If legislated, the bill, currently referred to as the Tax and Superannuation Laws 4 Amendment (2015 Measures No. 4) Bill 5 2015: Choice of fund requirements, would amend the Superannuation Guarantee (Administration) Act 1992 (SGAA) so that employers are not required to give standard choice forms to temporary resident employees or when an employees’ superannuation fund has merged with another fund.
Employers who fail to give a standard choice form to an employee when required can be liable for Superannuation Guarantee Charge.
The draft bill Explanatory Materials says the standard choice form requirements are “particularly burdensome for employers that employ a large number of temporary residents.”
“Many temporary residents do not have existing superannuation arrangements and given the short term nature of their employment are unlikely to choose a fund.”
Under the new law, if passed, employers would not be required to give a standard choice form to an employees who holds a temporary visa, as defined by the Migration Act.
However, “these amendments do not affect an employee’s ability to choose their own fund under Division 4 of the SGAA.”
Also, employers would not be required “to give employees a standard choice form when their superannuation benefits are transferred from a chosen fund or a default fund to a successor fund as a result of a superannuation fund merger arrangement.”
Treasury says this current requirement is “similarly burdensome for employers.”
As currently drafted, and if passed by the Parliament, the changes would apply from 1 July 2015. Though there is an allowance where the 28 day period includes 1 July.
The Treasury is accepting consultations on the Exposure Draft until the 15th of April 2015.
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