› documents › oli › ma_int_cofemplguid.pdf ing invites your employees to do nothing.a standard...

A guide for employers to the new Choice of Superannuation legislationNovember 2004

ING invites your employees to do nothing.

Integra – Super for Employers

ING818_Integra2.indd 1ING818_Integra2.indd 1 5/11/04 4:23:09 PM5/11/04 4:23:09 PM

“This new super law is meant to give people choice.

Don’t they have choice already?”

That’s right, Choice of Superannuation Fund has been introduced. And yes, with ING, your employees can choose where their super is invested.

While we recognise that the commencement of Choice of Superannuation Fund may present you with a few challenges, we also believe that the challenges you will face can be minimised. By already having your employer superannuation with ING, one of Australia’s leading investment, superannuation and insurance providers, and having established a competitive plan that already offers your staff a wide range of choice, you and your employees are well placed in the Choice of Superannuation Fund environment.

To help you keep up to date throughout the lead up to the commencement of the new legislation we have developed a series of Employer Updates. In this edition, we look at what Choice of Fund is, what it means for you at this point in time and also what ING is doing to support you and your employees through this period of change.

>>

2


“New super law? Sounds super confusing”

This material was prepared on 5 November 2004 and refl ects the legislation which was operational at this date, but this may be subject to change.

What is Choice of Superannuation Fund and why has it been introduced?By now you would probably be aware that Choice of Superannuation Fund legislation has been passed which will allow employees, with some exceptions, to choose an eligible choice fund into which their employer Superannuation Guarantee (SG) contributions are paid. Choice of Superannuation Fund has been introduced to provide employees with the freedom to select their own superannuation fund and encourage them to take control of, what for many will be, their biggest source of retirement savings. The ability to choose a superannuation fund will commence on 1 July 2005.

Who will Choice of Superannuation Fund legislation apply to?The government has estimated that Choice of Superannuation Fund (Choice) legislation will affect 4.82 million employees and 654,000 employers in the Australian workforce. (Source: The Association of Superannuation Funds of Australia(ASFA)).

As indicated above, this legislation will only apply to those making or receiving Superannuation Guarantee contributions after 1 July 2005, having no bearing on contributions paid before this time or to future employer contributions outside of the Superannuation Guarantee (e.g. salary sacrifi ce).

Who will Choice of Superannuation Fund NOT apply to?Generally, Choice of Superannuation Fund legislation will not require an employer to contribute to an employees chosen fund where they fall within one of the following groups:

• Employees whose contributions are made to unfunded public arrangements (e.g. applies to some Commonwealth State and local Government employees).

• Public sector employees who currently have contributions made to either the Commonwealth Superannuation Scheme (CSS) or the Public

Sector Superannuation Scheme (PSS), or under the Superannuation (Productivity Benefi t) Act 1988 until such time further legislation is enacted giving them choice.

• Employees of workplaces that are covered by Certifi ed Agreements or Australian Workplace Agreements under either the Industrial Relations Act 1988 or the Workplace Relations Act 1996 which nominate a specifi c superannuation fund.

• Employees subject to certain Victorian government employment agreements in force under the Employee Relations Act 1992 of Victoria and which continues to be in operation under section 515 of the Workplace Relations Act 1996.

• Employees who currently have all or part of their contributions made under, or in accordance with, a State industrial award.

• Employees who are receiving defi ned benefi ts (benefi ts which upon retirement are defi ned partly or wholly by referring to their salary or a specifi ed amount) and whose benefi t is not reduced because contributions are made to another fund instead of the defi ned benefi t fund; and

• Employees whose contributions are made under a law of the Commonwealth, of a State or of a Territory.

What will an employee need to do if they have choice, but do NOT use it?Under Choice, an employee can do one of two things:

• Do nothing and stay in their employer’s default eligible choice fund, or

• Choose an alternative eligible choice fund (the ‘chosen fund’) to which their employer will need to contribute Super Guarantee contributions for their benefi ts.

If an employee does not exercise choice, then their employer can choose a complying superannuation fund/scheme or Retirement Savings Account (RSA) to contribute their SG benefi t to. Given this, it is expected that initially the default eligible choice fund will be the employer fund in place as at 30 June 2005 (providing this is an eligible choice fund as outlined in the legislation).

3

>>It doesn’t have to be. ING is committed to making Choice of Superannuation Fund easy! Here are the facts, clear as can be.


4

What will an employee need to do if they wish to make a new fund choice (i.e. direct their contributions to another fund)?For an employee to exercise choice their employer must provide them with a ‘standard choice form’. A standard choice form must:

• Advise the employee that they can choose their own ‘eligible choice fund’,

• Contain the name of the fund their employer has chosen to contribute to on their behalf (the default eligible choice fund) if they do not make a new fund choice,

• Provide additional information if the employee is a member of a defi ned benefi ts scheme (the content of the additional information requirement will be confi rmed in the Choice of Fund regulations which are yet to be released); and

• Provide any other information that may be required by the regulations.

An employer must contribute the Super Guarantee benefi t to the chosen fund of their employee within two months (or earlier at the employer’s discretion) after the employee has provided them with written notice.

Where an employee has selected a fund in the previous twelve months, an employer is not required to accept another standard choice form from that employee within the same twelve month period.

At what time will a standard choice form need to be provided by you to your employees?Before 29 July 2005, employers will need to provide a standard choice form to each employee employed by the employer as at 1 July 2005.

After 1 July 2005 employers will also need to:

• Ensure a standard choice form is provided to all new employees (employed by your company on or after 1 July 2005) within 28 days of their commencement,

• Provide employees, who have not exercised choice within the previous twelve months, a standard choice form within 28 days of it being requested in writing,

• Where an employee has chosen a fund that is no longer an eligible choice fund provide them with a standard choice form within 28 days of becoming aware; and fi nally,

• Provide an employee, who is using the employer’s default eligible choice fund, with a standard choice form within 28 days of an employer changing the fund.

ING will keep you informed about how you will be able to access a standard choice form prior to Choice of Superannuation fund commencement.

What level of responsibility do employers have for an employee fund choice?Employers are not liable to compensate any person for loss or damage arising from any action you take in complying with Choice of Superannuation Fund legislation.

What penalties will exist for employers who do not comply with Choice of Superannuation Fund legislation?Where an employer makes an SG contribution to a fund, other than a chosen fund, the shortfall in the Superannuation Guarantee owing to the employee for the quarter will be increased by an amount not exceeding $500 per quarter or per notice period for each employee. The end of the notice period is determined by the Taxation Commissioner. In addition to the SG shortfall an interest component and administration charge is also incurred. This is known as the Super Guarantee Charge. The Super Guarantee Charge is not tax deductible.

What insurance implications might Choice of Superannuation Fund legislation have on an employer default fund?Where an employee does not make a new fund choice, the default eligible choice fund into which the employer does contribute will be required to offer life insurance cover. The government has indicated that it intends to consult with the industry before prescribing the characteristics, minimum level of insurance cover and opt-out provisions that will be set in the regulations.

What will the government do to educate consumers about Choice of Superannuation Fund?The Federal Government has announced that it will establish an advisory committee to formulate an education campaign supporting the Choice of Superannuation Fund introduction.

The government has committed $2 million to a consumer information centre in addition to the $14 million previously announced to be spent on the execution of the campaign. (Source: The Association of Superannuation Funds of Australia(ASFA))

Please note: If your employees are NOT eligible for choice of superannuation fund, you won’t be required to provide your employees with a standard choice form, and the following will NOT apply to you.


5

“I can see now what the government’s done.

Now what’s ING doing?”

ING is doing plenty. For a start we’re going to keep offering employees choice with their super and will help you to make the administering of contributions easier!

>>

As an employer with an ING employer superannuation plan you can feel confi dent that you are supported by one of the world’s largest wealth managers and one of the largest and most highly respected providers of superannuation and insurance in the Australian marketplace.

Integra – Super for Employers (Integra), ING’s small to medium business superannuation solution is one of the largest funds of its kind in the market, managing growing and protecting over 28,000 super funds, on behalf of 460,000 employees. Through Integra, your employees are well placed in the Choice of Superannuation Fund environment.

Have a look, the choice is all theirs!

✓ Choice of 50 individual investment options, with varying levels of risk, across all major markets and asset classes.

✓ Choice of over a dozen of the world’s leading investment managers, including ING and OptiMix.

✓Choice of convenient insurance options that can include Death Only cover, Death and TPD, and Group Salary Continuance.

✓ Choice to roll-over their super on retirement into a selection of pension products, ensuring signifi cant tax benefi ts.

✓ Choice to learn more about super and investing at any time at no extra cost, through ING’s integrated member education program.

✓ Choice to gain support through dedicated online or telephone member servicing.

ING employer superannuation products already offer your employees choice.


ING is making the administering of contributions easier under Choice of Superannuation Fund:

Enhancements to ING’s EasyTransact making electronic processing even easier!ING will be introducing enhancements to EasyTransact in readiness for the commencement of Choice of Superannuation Fund. These enhancements are designed to help reduce the potential administrative burden employers could face if they are required to submit contributions to multiple funds through multiple providers.

Get prepared for Choice of Superannuation Fund and ensure you are registered to use EasyTransact now!As an employer, you can simply register online for EasyTransact by visiting the ING Employer Centre at www.ing.com.au. You can also access a downloadable EasyTransact instruction guide at this website as well as take a site tour. Additional support and training can be obtained by contacting the EasyTransact Support team on 1800 251 588, business days between the hours of 9.00am and 5.00pm, Sydney time.

ING – committed to maintaining effi cient working relationships with your existing outsourced payroll solutionIf you are an employer who currently uses an outsourced payroll solution to administer payment of employee SG contributions, you will continue to be supported by ING under the Choice of Superannuation Fund regime. ING currently accepts employer contribution reports from payroll bureaus and is committed to developing the existing strong relationships with these groups to ensure contributions are received and processed quickly and effi ciently.

ING will continue to accept paper based remittances!While we believe electronic contribution remittance through EasyTransact will be the preferred option for most employers, ING understands that some employers prefer to remit contributions in more traditional ways. So, if you are an employer who currently makes SG contributions and remittances to ING through paper and cheque, you will still be able to do so after Choice of Superannuation Fund commences. However, contributions and remittances to any other non-ING superannuation funds will need to be processed through EasyTransact – so we encourage you to make the switch and register now!

ING is ready to make the administering of Choice of Superannuation Fund easy

Through EasyTransact you will have the

fl exibility not only to make contributions to

ING superannuation funds, you will also be able

to make contributions to any other eligible

choice fund your employees have selected. ING

will accept payment from you and remit to non-

ING superannuation funds on your employees’

behalf – it’s that simple!

6

>>


7

Introducing ING’s Choice of Superannuation Fund client communication program –you’re involved!We are introducing a series of quarterly Choice of Superannuation Fund updates that will be regularly mailed to you and where appropriate to your employees directly. These communications are designed to help you keep up-to-date with Choice of Superannuation Fund, its potential impacts, and what ING is doing to prepare for its commencement. Member updates are designed to assist you in explaining Choice of Superannuation Fund to your staff and will contain information about their current employer superannuation arrangement. Employer and member updates can be accessed by you through ING’s Employer Centre at www.ing.com.au anytime, and your employees can access member updates directly through the Customer Centre at www.ing.com.au too!

ING’s Employer Centre can be located on the above website by clicking on the Employer ‘Info’ link on the left hand side of the www.ing.com.au homepage, then by clicking on either the ‘ING Employer Centre’ icon or link. Your employees can access Choice of Superannuation Fund updates by clicking on the Choice of Superannuation Fund icon once they have logged into the www.ing.com.au Customer Centre.

Don’t forget about ING’s existing member education package – already working to support you!We recently upgraded our L-earn fi nancial education@work program, ING’s online and seminar based member education package and it can be

accessed right now by all your plans’ members. L-earn provides you with yet another way of providing your employees with:– An overview of Australia’s superannuation system;– An understanding of the tax advantages of investing via the superannuation framework;– An explanation of the benefi ts of salary sacrifi ce; and– Other relevant information pertaining to superannuation co-contributions and other government schemes.

Members can access L-earn in two ways:

L-earn onlineL-earn online provides education on a range of topics including investing, super, saving/budgeting and insurance. The program also includes case studies and graphical examples – all at the user’s preferred pace and at the click of a button.

Access to L-earn online is available throughwww.ing.com.au.

L-earn seminarsL-earn workplace seminars have been designed by ING’s investment and technical experts, and allow employees to access even more fi nancial education and at no extra cost. Seminars can be arranged at a time that suits you and your staff and are organised through your plan’s fi nancial adviser. To fi nd out more about ING’s comprehensive member education suite visit ING’s Employer Centre at www.ing.com.au or speak to your fi nancial adviser.

“Ok. I get it now. But what if I don’t tomorrow?”

It’s OK. ING is committed to keeping you and your employees informed. >>


“If I need you, where do I fi nd you?”

ING is committed to helping you and your employees through Choice of Superannuation Fund. For more information on the legislation, or how we are supporting you, please visit www.ing.com.au or speak to your fi nancial adviser.

>>CUSTOMER SERVICES

Phone enquiries 133 665

Email address [email protected]

Postal addressIntegra

GPO Box 5306

Sydney NSW 2001

Internet address www.ing.com.au

The Trustee is ING Custodians Pty Limited

ABN 12 008 508 496

AFSL 238 346

347 Kent Street,

Sydney NSW 2000

This material was prepared on 5 November 2004 and refl ects the legislation which was operational at this date but may be subject to change. This material has been prepared without taking into account an investor’s objectives, fi nancial situation or needs. Before making a decision based on this material, a potential investor should consider the appropriateness of the advice, having regard to their objectives, fi nancial situation and needs. EM

P –

A


› documents › oli › ma_int_cofemplguid.pdf ing invites your employees to do nothing.a standard...

Documents