Many Australian employers have not yet fully assessed the impact that the looming Stronger Super reforms will have on their businesses. According to a new survey, more than half do not yet have a plan to ensure compliance.
Superannuation is an expensive and highly regulated part of employees’ benefits packages, according to Aon Hewitt senior consultant and actuary, Ashley Palmer. When changes are made to the way that it is regulated, employers usually have to make complex decisions.
Among the survey’s findings are that:
29% of organisations are currently paying more than the Superannuation Guarantee, but only 11% intend to stay ahead of the minimum by the same amount when it increases
Employers using a Base Plus approach to remuneration are more likely (40%) than those using a Remuneration Packaging approach (12%) to set aside additional funds to finance the Superannuation Guarantee increase in 2013
58% of organisations say they have not yet determined their response to the Superannuation Guarantee increases beyond 2013
Only 12% of companies intend to commence a review to determine which MySuper fund to use as their default fund, while 52% are still deciding what to do
“The surprising finding here is that over 50% of companies surveyed have not yet decided what to do about choosing a default fund, compared with only 12% that intend to conduct a review to determine which fund to choose,” Palmer said. This is concerning, he said, because in less than a year companies will have to be able to contribute to their chosen default MySuper fund.
These reforms, and the attention that they will require, might be daunting for employers – but coming up with a plan is important, as failing to do so could lead to bigger problems, including financial penalties.