It's been a long time coming, but employees covered by an enterprise agreement can, from 1 January 2021, choose their preferred super fund.
They are no longer bound by their employer's choice of super fund.Alexandra Hodsman, Maddocks Lawyers
On 25 August 2020 the Senate passed the new laws which permit employees covered by enterprise agreements or a workplace determination to choose their superannuation fund (including a self-managed superfund). 1
The new laws:
If a workplace determination or enterprise agreement made on or after 1 July 2020 includes a term that restricts choice of superannuation fund (for example, if it disregards the changes made by the Bill), then that term will not be enforceable if the employee has given the employer, or the Commissioner of Taxation, written notice of its chosen fund. 2
Examples of terms which restrict choice include terms that specify the name of the fund to which the employer must contribute, or terms that list several funds the employer must choose between to make contributions to.
The Treasurer Josh Frydenberg and Jane Hume, Assistant Minister for Superannuation, Financial Services and Financial Technology, stated that the Bill addresses the findings of the Financial System Inquiry and the Productivity Commission Inquiry into the efficiency and competitiveness of the superannuation system which found that this reform was 'much needed' and that denying choice of fund can discourage member engagement and lead to them paying higher fees.
The changes are not retrospective which will means that the new law will only effect employees who enter into a new workplace agreement or determination after 1 January 2021.
For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Commercial team.
You can read earlier ClearLaw articles on a range of topics, such as:
Alisha Wright is an Associate in Maddocks’ Commercial Team.
Alisha advises extensively in a range of matters including:
Alisha has recently assisted with providing advice to SMSFs in relation to their compliance obligations and the drafting of bespoke shareholders agreements.
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For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of their team.