The Copper report into superannuation was released yesterday.  Significant changes were proposed to the default superannuation options provided by employer superannuation schemes, with the proposal to introduce “MySuper” as the default superannuation option for all Australians.  There were also proposals to improve the back office processing.

It was noticeable however, that very little change was recommended for the SMSF sector, confirming once again that the Self Managed Super Fund sector is performing well and serving the needs of it’s members.  In fact it was telling to learn that of the members of the Cooper Review panel, half had SMSF’s themselves, including Jeremy Cooper.  It is little wonder then that the SMSF sector has grown to be the largest sector within the superannuation environment, and continues to be the fastest growing.

With the proposal now to have most Australian’s start their superannuation journey in the very basic, no frills “MySuper”, it may be that the future of superannuation consists of two phases.  In the early years of a persons life, the MySuper option is adequate for their needs.  At some point in their life, when the balance grows to a point where the person starts to take in interest in how much they have, they move to an SMSF, so that they can work towards achieving their particular goals and objectives in a customised way.  I guess this is a bit like motor cars.  Our first car is pretty basic and cheap, then latter in life, we get a car to fit our particular family arrangement or lifestyle needs.

By Jamie Cheng

Under the new Fair Work Bill there was supposedly double the unfair dismissal applications in the months after the implementation in July 1, 2009. With the increase it becomes evident that employers should be wary of the new legislation to avoid significant costs.

A major change with the legislation is that small businesses are now more susceptible to unfair dismissal claims as of July 1, 2009. The definition of a small business has also changed. A small business is now defined as a business that employs less than 15 full-time equivalent employees.

Note: A business may employ more than 15 employees and still be classified as a small business as long as the combined hours of the employees are under 15 full-time employees.

Below is a table from the Australian Financial Review that summarises the rules around dismissals with a useful link to the Small Business Fair Dismissal Code, which if followed will be deemed a fair dismissal.

Fair’s fair

Rules around dismissals

Source: Australian Financial Review, Business hit as dismissal claims soar, October 20, 2009.

jamie.k.cheng@gmail.com

Employers are required to meet minimum Superannuation Guarantee obligations under Australian law.  Failure to do so can result it quite severe penalties.

The ATO have published a very useful and concise (for a government department, these things are all relative), article on your obligations including links to applicable forms.

Visit:

http://www.ato.gov.au/super/content.asp?doc=/content/19818.htm&page=3#P36_3559

Information on award changes as part of the Rudd government’s election promises can be found at: www.fairwork.gov.au

Changes to unfair dismissal provisions are the most prominent, however in the super space you should note the following (provided to us by Colonial First State technical team):

• From 1 January 2010, employers with employees covered by modern awards must pay their employees’ super contributions to a fund nominated in the award if an employee doesn’t choose their own fund.
• The nominated default funds are any named in the relevant award plus any fund to which an employer was contributing for its employees before 12 September 2008.