- The government has recently released the ‘Stronger Super’ report, which provides a broad picture of some of the likely reforms to the superannuation industry over the coming years.
- Many of the proposed Stronger Super reforms will affect employers.
- Whilst the reforms are intended to make a more efficient system for employers, employees and super funds alike, there may be initial costs for employers during the implementation of these reforms. In addition, employers may face financial penalties if new requirements are not complied with.
The government is currently in the process of undertaking one of the largest upheavals to the Australian superannuation system since the inception of compulsory employer contributions in 1992. Although the majority of the proposed changes primarily affect superannuation fund trustees, there are a range of proposed changes that will have an effect on employers.
Background to the proposed superannuation system changes
In May 2009 the government announced a wide-ranging review into the governance, efficiency, structure and operation of Australia's superannuation system. The review, known as the ‘Super System Review’, was chaired by Jeremy Cooper. The review’s final report containing 177 recommendations was handed to the government on 30 June 2010. On 16 December 2010 the government published its response to the recommendations, titled ‘Stronger Super’.1
Although some of the recommendations in the Super System Review have been specifically approved or specifically rejected in the Stronger Super response, many of them are still subject to further consideration by the government through a process of consultation with parties including industry groups and APRA. Therefore, there is still some uncertainty about what package of reforms will finally be legislated. However, a broad picture of the likely changes has emerged from the Stronger Super response package. The proposed changes affecting employers are outlined in the following table:
Proposed changes affecting employers
Click here to view the table.
Employers will need to monitor the Stronger Super developments once the government makes further announcements and starts implementing the reforms. Although the end product will be a more efficient system for employers, employees and super funds alike, inevitably there will be some upheaval associated with a regulatory reform of this nature which will affect dealings between employers and their employees.