The Government has introduced legislation to expand choice of super fund for employees and close a superannuation salary sacrifice ‘loophole’.
These changes are contained in the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 2) Bill 2017. Meanwhile several superannuation Bills have been introduced to the Senate before the House of Reps.
Currently choice of super fund does not extend to employees under an enterprise agreement or workplace determination. Employers can satisfy the choice of fund requirements by making contributions to a super fund nominated in the agreement or determination.
The Bill, if enacted, would allow employees under an enterprise agreement or workplace determination to have choice of their super fund, but only for agreements and determinations made on or after 1 July 2018.
This change was a recommendation of the Financial System Inquiry and one the Government announced it agreed with, in October 2015.
“Lack of choice of fund for all workers disadvantages some Australians and contributes to employees having multiple superannuation accounts and paying multiple sets of fees and insurance premiums, which can reduce their retirement income. It also leads to member disengagement with their superannuation,” says the Explanatory Memorandum to the Bill.
The Bill would also close a long-standing Superannuation Guarantee salary sacrifice ‘loophole’, which allows employers to claim employee salary sacrifice super contributions against their SG obligations. The change was announced in July 2017 but takes effect on 1 July 2018, if the Bill is passed.
The Bill was introduced, read a second time and debate adjourned. Parliament next sits on 16 October.
Update: The Bill has been referred to the Senate Economics Legislation Committee, with a report due 23 October 2017.