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(Apr-05): Left out of choice
By Mike Taylor
The Associationof Superannuation Funds of Australia (ASFA) has questioned proposed amendments to the new choice of fund legislation which would effectively exempt some employers from being required to provide employees with the standard choice form.
In a submission lodged with Treasury in early March, ASFA’s director of Policy and Research, Michaela Anderson said her organisation could see no reason for granting such an exemption to employers who required employees to choose a superannuation fund as a condition of employment.
“If an employer has imposed a requirement to nominate a superannuation fund as a condition of employment, then presumably, where the prospective employee has failed to do so, the employee will not be able to commence employment,” she said.
“Conversely, should the employee be able to commence employment without providing the details of their superannuation fund, then the requirement to provide the information must not be a condition of employment.”
Dr Anderson said that if the intention of the amendment was to provide certainty to those employers who required employees to choose a fund as a condition of employment, then any such amendment needed to be worded carefully to ensure there were not unintended consequences.
She said that while the Government was proposing that the exemption would only apply if “the employer has never made arrangements to pay superannuation guarantee contributions to a fund, other than ones chosen by their employees”, ASFA considered a more appropriate wording was that the exemption would only apply if “the employer has never made arrangements to pay superannuation guarantee contributions other than to a fund chosen by their employees”.
Dr Anderson said that while the suggested change was minor, its wording was more consistent with the choice of fund policy of ensuring that all employees who had choice and had not chosen a fund were informed of their right to choose a fund and the default fund arrangements which would apply if they did not choose a fund.
AUTHOR
Mike Taylor
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