In April the Treasury released a draft bill for consultation, which would remove the requirement for an employer to provide a temporary resident employee with a Standard Choice Form.
The changes are supported by the Australian Chamber of Commerce and Industry, the Australian Small Business Commissioner, Industry Super Australian and the Australian Institute of Superannuation Trustees, among other bodies.
However several of the submissions raised the issue of multiple superannuation accounts. While some said that the change in the standard choice form rules would prevent the creation of multiple accounts – as temporary residents moved from one employer to the next, it could also exacerbate the problem, with future contributions going to new superannuation accounts.
Mercer Consulting does not support the measures, saying the ability of an employer to deny a request for a Standard Choice Form by a temporary visa holder was of “particular concern.”
Mercer says the measures will make it much more likely that employer contributions are not made to an employee’s existing superannuation fund, resulting in an “increase in multiple accounts, multiple fees etc and a higher likelihood of lost accounts.”
“The removal of the requirement to provide a Choice of Fund form will hence work against the Government’s intention to reduce the number of multiple accounts and reduce lost accounts.”
Mercer also questions if the change will reduce red tape for employers, noting that processes will need to be put in place to identify which employees hold the correct type of visa for the exemption. Another submission also raised concerns with the administrative issues of correctly identifying the type of visa held by an employee.
While supporting the measures the Small Business Commissioner wants broader reforms, saying “small business commonly raises concerns with our Office of being treated as a free administrator and collector in the operation of the superannuation system.”
AIST said a better way to tackle these issues would be through Single Touch Payroll.
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