In the 2020–21 federal Budget, the government announced the Super Reforms – Your Future, Your Super measure. We urge business owners and employers to familiarise themselves with these changes so that you can understand how these shifts might impact your business and employees.
Expected to take effect 1 July 2021, the reforms mean 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.
The intent of this proposed measure is to:
- stop the creation of unintended multiple superannuation accounts for employees
- address underperformance in superannuation
- make it easier for members to choose a well-performing product
- increase accountability and transparency from superannuation providers.
Should the legislation pass in its current form, the new requirements will apply for new employees who commence employment from 1 July 2021.
Retail Industry superannuation fund, Rest Group Executive of Employer & Industry Engagement, Deborah Potts says, “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 and members stay ahead of the changes, Rest have created dedicated information for the Your Future, Your Super legislation, which will be continuously updated as more information comes to hand.
To keep updated with these changes, make sure you visit the ATO website.