SMEs have wait ahead on default super decision as non-payments issue continues to bubble
Thursday, July 13, 2017/
The small business community is indicating a preference to keep things as they are when it comes to nominating super funds for workers, as issues of non-payments of superannuation continue to bubble away in the background.
Fairfax reports a recent survey by Cameron Research Group into distributing default super suggest 84% of SMEs surveyed prefer the current model, by which super funds are nominated in workplace awards and workers have an at times limit scope to make a choice of fund outside of this.
While the Productivity Commission and the tax office continue to dig into Australia’s superannuation system, both in terms of its competitiveness and non-compliance around paying workers superannuation guarantee contributions, the small business community continues to call for simplicity in the sector.
Submissions are currently open for the third stage of the Productivity Commission’s review into the nation’s retirement savings system, with the commission asking the public to weigh in on how a body would be formulated to choose default super products to avoid risks of “politicisation and bias” if a new format was put in place.
It may be some time before small business employers know whether processes for staff selecting super funds will change, with submissions for the third stage of the review closing on August 21, and a final report to be delivered in June 2018.
Meanwhile, small business owners who are failing to comply with required super payments continue to be in the spotlight, with experts suggesting more still needs to be done to track and deliver unpaid super.
This issue was raised at the annual Colloquium of Superannuation Researchers Symposium earlier this month, when special adviser to Industry Super Australia Phil Gallagher highlighted billions were going missing each year.
In May, Inspector-General of Taxation Ali Noroozi raised the possibility of random audits of businesses to ensure super entitlements were being correctly paid.
“It should be noted that, in the long term, random audits may also lead to better targeting of non-compliant taxpayers,” he said.
Small Business and Family Enterprise Ombudsman Kate Carnell has previously told SmartCompany SMEs not paying super should expect to receive a knock on the door from the tax office eventually.
“To start with, it’s not fair to employees, it’s their money,” Carnell said in May.