In the last of our three-part series covering the upcoming superannuation legislation changes, we cover the new MySuper default fund and the new director’s responsibilities.
The new MySuper product is a single standardised default super product that can be offered by different superannuation funds. It is designed to modernise and streamline the superannuation process, and make it easier for employees who don’t nominate a specific super fund to their employer.
There are a number of standards that funds, offering a MySuper product will have to abide by. These include a ban on hidden fees, standardised reporting policies, and removal of commissions in relation to group insurance, as well as a number of additional changes and features.
Under the new legislation, employees who don’t nominate a superannuation fund will have to have their superannuation contributions automatically paid into a MySuper product and therefore it is the employers responsibility to ensure the businesses default fund is part of MySuper. Employees will still have the same options to nominate alternative superannuation funds, including self-managed super if they wish.
As part of the new legislation, company directors are to be held more accountable for any lack of compliance on the part of their business, especially in making payments to superannuation funds. Where previously there were limitations on the responsibility of directors in certain circumstances, these have now been addressed and accountability has been increased.
As the director of a company, you are personally responsible for any non-compliance with the new superannuation legislation. This means that you can personally face fines if your business does not follow the new superannuation rules. The amount you will need to pay if you have failed to make sufficient contributions will be the same as the amount of the outstanding contribution.
The fines for non-compliance with procedural and documentary legislation are $510 per contravention for an individual, and $2,550 per contravention for a body corporate. If your business or company pays the fine on your behalf, you will no longer be considered liable. Your personal liability is also removed if your company appoints an administrator or begins liquidation proceedings before being issued with a penalty notice, or within 21 days of its issue.
The planned superannuation changes are going to affect all businesses that have employees.
Make sure you are prepared and know what your business needs to do to comply with the new legislation, and that your employees are informed of how the changes will affect them, particularly in regards to remuneration and pay increases.
Planning now means that you have a greater chance of a smooth transition when the changes come into effect in July 2013, and reduces the likelihood of your business being disadvantaged financially as a result of the changes.