And if your business is offered incentives and inducements such as gifts, discounts or free tickets to sporting events in return for signing up to a particular super fund, this should raise a red flag for employers, ASIC says.
ASIC Commissioner Greg Tanzer says any trustees that offer employers inducements to choose their funds should be avoided and reported to ASIC.
Tanzer says inducements can cover a range of things such as corporate hospitality and tickets to sporting events, or discounts on products or services and many of these inducements are prohibited under s68A of the Superannuation Industry (Supervision) Act 1993.
'Employers should not choose a default fund on the basis of an inducement. I strongly encourage employers who are concerned they may have been offered an inducement that is illegal to contact ASIC,' Tanzer says.
The updates follow a review of some retail and industry super trustees to assess their compliance with s68A of the Superannuation Industry (Supervision) Act 1993.
Tanzer said ASIC will continue to monitor the area of employer inducements and may consider undertaking shadow shopping exercises to gain a better understanding of the employer experience when dealing with superannuation trustees and their associated businesses.
'Where we find evidence illegal inducements have been offered, ASIC will not hesitate to take action,' Commissioner Tanzer said.
Now employers can access a wealth of updated information from the Australian Securities and Investment Commission (ASIC)’s MoneySmart website to make informed choices about default superannuation funds for their staff.
Tanzer said the new information on ASIC’s MoneySmart website will assist employers to make important decisions about super funds.
'Super is a complex area, not just for individuals but for employers as well – and we know decisions that employers make can have a big impact on employees and their retirement savings,' Tanzer says.
Employers are encouraged to consider a number of elements when choosing a default super fund, such as the fees, the investment options offered, fund performance and insurance.
Choosing a default superannuation fund for your organisation’s employees can be a headache for many HR professionals.