From November 1, 2021, employers will need to take an additional step in hiring new employees to comply with the rules for selecting a pension fund.
Penalties may be imposed for non-compliance with the selection requirements.
Under current regulations, when hiring new employees, employers can add them to their default pension fund if the employee has not chosen a pension fund. Subsequently, for any new employees starting from 1 November 2021, employers will be required to contact the Australian Tax Administration (ATO) if the employee has not selected a fund and check to see if the employee has a “linked fund”. If an employee has a tied-up fund, the employer will need to make contributions to that fund rather than the default pension fund.
These provisions were adopted to prevent individuals from having multiple pension funds and to reduce the fees associated with setting up new funds each time an employee changes jobs.
Employers will be required to use ATO’s online services and request their employee’s superfund after they submit a tax number return or payroll in one click. To request a tied superfund, the employer (or its authorized representative) will need:
(Given by MTAQ News)