Explanatory Memorandum
(Circulated by the authority of the Minister for Small Business, the Hon Bruce Billson MP)General outline and financial impact
Choice of fund requirements
This Bill amends the Superannuation Guarantee (Administration) Act 1992 to remove the obligation for employers to offer a choice of superannuation fund to temporary resident employees, or when superannuation funds merge.
Date of effect: The amendments made by this Bill apply from 1 July 2015.
Proposal announced: 26 November 2014.
Financial impact: Nil
Human rights implications: This Bill does not raise any human rights issues. See Statement of Compatibility with Human Rights - Chapter 3, paragraphs 3.1 to 3.7.
Compliance cost impact: The targeting of the superannuation choice regime reduces the regulatory and compliance costs imposed on employers.
The regulation impact statement is included in this explanatory memorandum in the form it was approved in.
Summary of regulation impact statement
Regulation impact on business
Impact: Medium
Main points:
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- These changes simplify the superannuation choice regime, thereby reducing business compliance costs by simplifying when a standard choice form must be provided to an employee by an employer.
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- Employers will no longer have to provide a standard choice form to a temporary resident employee or when superannuation funds merge. Previously, an employer that did not provide a standard choice form to employees in these situations may have been liable for the choice shortfall penalty.
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- These changes will reduce the administrative burden for employers. Employers will no longer have to supply the standard choice form to employees in these circumstances, nor will they need to allocate time explaining the importance of completing the form and how to do so.
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- In particular, these changes will reduce compliance costs for businesses operating in industries that employ a high volume of individuals on working holiday visas, such as in hospitality and agriculture.
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- Employees in these situations still retain the right to choose a superannuation fund if they wish to do so. These amendments appropriately balance reducing business compliance costs with providing choice to employees.