[2013] FWCFB 9350 |
FAIR WORK COMMISSION |
STATEMENT |
Fair Work Act 2009
s.149A - Superannuation contributions for defined benefit members
s.155A - Terms dealing with superannuation
SENIOR DEPUTY PRESIDENT ACTON |
MELBOURNE, 27 NOVEMBER 2013 |
Superannuation.
[1] Further to the Statement issued by the President on 7 November 2013 [[2013] FWC 8765], this Statement outlines proposed changes in respect of the superannuation clause in modern awards. The current standard superannuation clause in most modern awards is set out at Attachment A.
Section 149A—Superannuation contributions for defined benefit members
[2] Section 149A was inserted in the Fair Work Act 2009 (the Act) with effect from 1 January 2013 as part of the changes to the Act in relation to superannuation. Section 149A provides that from 1 January 2014, modern awards must comply with the following:
“149A Superannuation contributions for defined benefit members
(1) A modern award must include a term that permits an employer covered by the award to make contributions to a superannuation fund or scheme in relation to a default fund employee who is:
(a) covered by the award; and
(b) a defined benefit member of the fund or scheme.
Note: An employer may make contributions under this term even if the superannuation fund or scheme to which the contributions are made is not specified in the modern award because of section 155A.
(2) An employee is a default fund employee if the employee has no chosen fund within the meaning of the Superannuation Guarantee (Administration) Act 1992.”
[3] Prior to 1 January 2014, the Commission proposes to vary all modern awards to give effect to s.149A of the Act, including by inserting a superannuation clause in those modern awards that currently do not have such a clause.
Section 155A—Terms dealing with superannuation
[4] Section 155A was inserted in the Act with effect from 1 January 2013 and provides that from 1 January 2014 modern awards must comply with the following:
“155A Terms dealing with superannuation
(1) A modern award must not include a term that has the effect of requiring or permitting contributions, for the benefit of an employee covered by the award who is a default fund employee, to be made to a superannuation fund or scheme specified in the modern award, unless one of the following is satisfied in relation to the fund or scheme:
(a) it is a fund that offers a MySuper product;
(b) it is an exempt public sector superannuation scheme.
Note: Contributions may be made to a superannuation fund or scheme for its defined benefit members under section 149A even though the fund or scheme is not specified in a modern award because of this section.
(2) Subsection (3) applies if the Australian Prudential Regulation Authority (APRA) gives the FWC notice under subsection 29U(4) of the Superannuation Industry (Supervision) Act 1993 that a regulated superannuation fund no longer offers any MySuper product.
(3) The FWC must:
(a) ensure that the text of a modern award as published by the FWC does not include a term that has the effect of requiring or permitting contributions, for the benefit of an employee covered by the award who is a default fund employee, to be made to the fund; and
(b) do so as soon as is reasonably practicable after receiving the notice.
(4) Subsection (5) applies if APRA gives the FWC notice under section 29XC of the Superannuation Industry (Supervision) Act 1993 that a scheme has ceased to be an exempt public sector superannuation scheme and does not offer a MySuper product.
(5) The FWC must:
(a) ensure that the text of a modern award as published by the FWC does not include a term that has the effect of requiring or permitting contributions, for the benefit of an employee covered by the award who is a default fund employee, to be made to the scheme; and
(b) do so as soon as is reasonably practicable after receiving the notice.”
[5] Prior to 1 January 2014, the Commission proposes to vary modern awards to delete any specified superannuation funds that do not offer a MySuper product or are not an exempt public sector superannuation scheme and to clarify that any successor fund must provide equivalent rights.
Grandfathering provision
[6] All modern awards that include a superannuation provision contain the following “grandfathering” provision:
“S.4 Superannuation fund
Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause S.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause S.2 and pay the amount authorised under clauses S.3(a) or (b) to one of the following superannuation funds or its successor:
(a) (names of specified funds) . . .;
(b) any superannuation fund to which the employer was making superannuation contributions for the benefit of its employees before 12 September 2008, provided the superannuation fund is an eligible choice fund.”
[7] This provision was inserted by the Full Bench in the Award modernisation decision of 19 December 2008 [[2008] AIRCFB 1000] which stated at paragraph 90:
“We have decided to allow as a default fund any fund to which the employer was making contributions for the benefit of employees on 12 September 2008. This approach is likely to minimise inconvenience for employers.”
[8] This wording was confirmed in the Full Bench decision of 2 September 2009 [[2009] AIRCFB 800] and incorporated in all modern awards that contain a superannuation clause.
[9] In order to comply with s.155A of the Act, prior to 1 January 2014 the Commission proposes to vary the grandfathering provision in modern awards to make it clear that the fund or scheme to which an employer makes contributions must offer a MySuper product or be an exempt public sector scheme. The Commission also proposes to include a grandfathering provision in modern awards which currently do not have a superannuation clause.
[10] In the case of an existing grandfathering provision the following change is proposed:
“any superannuation fund to which the employer was making superannuation contributions for the benefit of its employees before 12 September 2008, provided the superannuation fund is an eligible choice fund and offers a MySuper product or is an exempt public sector scheme.”
[11] In the case of modern awards which currently do not have a superannuation clause, the Commission proposes to insert the following grandfathering provision in those modern awards:
“any superannuation fund to which the employer was making superannuation contributions for the benefit of its employees before 27 November 2013, provided the superannuation fund is an eligible choice fund and offers a MySuper product or is an exempt public sector scheme.”
Draft determinations
[12] The proposed draft determinations to give effect to ss.149A and 155A of the Act will be published on the Fair Work Commission’s website by 2 December 2013. The draft determinations do not represent the concluded view of the Commission regarding the nature of the variations necessary to give effect to ss.149A or 155A of the Act.
[13] All interested parties will have an opportunity to make submissions in respect of the proposed variations set out in the draft determinations. Any person or organisation wishing to make a submission in respect of the proposed variations in relation to any modern award should file a short written submission by 4.00 pm on 10 December 2013. Written submissions are to be filed electronically to amod@fwc.gov.au and will be posted on the Commission’s website.
[14] The Full Bench will conduct a hearing at 10.00 am on 13 December 2013 in Melbourne, with video links to other capital cities as necessary, in respect of the draft determinations for the purposes of deciding the content of any final determinations.
SENIOR DEPUTY PRESIDENT
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ATTACHMENT A – Current standard superannuation clause
S.1 Superannuation legislation
(a) Superannuation legislation, including the Superannuation Guarantee (Administration) Act 1992 (Cth), the Superannuation Guarantee Charge Act 1992 (Cth), the Superannuation Industry (Supervision) Act 1993 (Cth) and the Superannuation (Resolution of Complaints) Act 1993 (Cth), deals with the superannuation rights and obligations of employers and employees. Under superannuation legislation individual employees generally have the opportunity to choose their own superannuation fund. If an employee does not choose a superannuation fund, any superannuation fund nominated in the award covering the employee applies.
(b) The rights and obligations in these clauses supplement those in superannuation legislation.
An employer must make such superannuation contributions to a superannuation fund for the benefit of an employee as will avoid the employer being required to pay the superannuation guarantee charge under superannuation legislation with respect to that employee.
S.3 Voluntary employee contributions
(a) Subject to the governing rules of the relevant superannuation fund, an employee may, in writing, authorise their employer to pay on behalf of the employee a specified amount from the post-taxation wages of the employee into the same superannuation fund as the employer makes the superannuation contributions provided for in clause S.2.
(b) An employee may adjust the amount the employee has authorised their employer to pay from the wages of the employee from the first of the month following the giving of three months’ written notice to their employer.
(c) The employer must pay the amount authorised under clauses S.3(a) or (b) no later than 28 days after the end of the month in which the deduction authorised under clauses S.3(a) or (b) was made.
S.4 Superannuation fund
Unless, to comply with superannuation legislation, the employer is required to make the superannuation contributions provided for in clause S.2 to another superannuation fund that is chosen by the employee, the employer must make the superannuation contributions provided for in clause S.2 and pay the amount authorised under clauses S.3(a) or (b) to one of the following superannuation funds or its successor:
(a) xxx Super fund;
(b) any superannuation fund to which the employer was making superannuation contributions for the benefit of its employees before 12 September 2008, provided the superannuation fund is an eligible choice fund.
A number of awards also contain the following additional provision:
S.5 Absence from work
Subject to the governing rules of the relevant superannuation fund, the employer must also make the superannuation contributions provided for in clause S.2 and pay the amount authorised under clauses S.3(a) or (b):
(a) Paid leave
While the employee is on any paid leave.
(b) Work related injury or illness
For the period of absence from work (subject to a maximum of 52 weeks in total) of the employee due to work related injury or work related illness provided that: