Superannuation – Retirement Funds Policy

Purpose

To ensure that all staff are aware of their rights to choice of Superannuation provider and that the company meets its superannuation obligations.

Background

Significant penalties attach to companies that do not meet their superannuation obligations.  This procedure should reflect the appropriate legislation that applies to your workers.

Scope

All Staff

Procedure

You need to discuss with your accountant procedures for ensuring that superannuation obligations are met and that they are properly accounted for.

The superannuation guarantee was introduced on [e.g. 1 July 1992] to ensure most employees receive superannuation support from their employers. You are an employer if you employ workers under an employment contract (oral or written) on a full-time, part-time or casual basis. You may also be an employer if you make payments under a contract.

Under the superannuation guarantee, you must pay compulsory superannuation contributions into a complying superannuation fund or retirement savings account so employees can enjoy the benefits of superannuation in their retirement. The superannuation support you provide for your employees is

usually tax deductible up to certain limits. If you don’t pay enough superannuation contributions for employees to the correct fund by the quarterly cut-off dates, you will be liable for a tax called the superannuation guarantee charge.

Under the superannuation guarantee, you have to pay superannuation contributions to the correct superannuation fund, by the cut-off dates, for all your eligible employees.

You may also be required to offer a choice of superannuation fund to your eligible employees.

The superannuation guarantee is administered on a self assessing basis. There are laws requiring you to meet your superannuation obligations, and it is your responsibility as an employer to ensure arrangements you have in place for your employees satisfy the government’s superannuation guarantee

requirements.

The minimum you have to contribute to a complying superannuation fund or retirement savings account is [9%] of an eligible employee’s earnings base. Your contributions need to be paid at least every quarter (that is, every three months). Superannuation contributions you pay for your employees are usually tax deductible.

If an employee pays their own personal superannuation contributions by making payments through the payroll system after tax has been deducted from their salary and wages (i.e. under an ineffective salary sacrifice arrangement), these contributions don’t count towards meeting your obligations under the superannuation guarantee. These personal contributions don’t count even if you, as the employer, have arranged for the payment to go into the employee’s superannuation account.