By Jason Spits
The Federal Opposition is proposing a series of changes to the Government’s Superannuation Safety Amendment Bill 2003 stating the amendments will “safeguard the superannuation savings of nine million Australians”.
The amendments will be moved by the Labor Party in the Senate by Shadow Minister for Retirement Incomes and Savings Senator Nick Sherry with the focus on compensation for theft and fraud, as well as regular payments of contributions and the removal of a tax office secrecy provision.
The amendments, if passed, will include full compensation to super fund members in the event of theft and fraud with that safety provision extended to cover negligence by trustees and private post-retirement pensions and annuities.
The changes will also push for unpaid 9 per cent compulsory superannuation guarantee (SG) contributions to be treated as an employee entitlement if a business fails and voluntary employee ‘salary sacrifice’ contributions will be paid to funds each quarter with regular superannuation contributions.
Sherry will also push for yearly reporting to members of defined benefit funds on the level of debt or surplus and details of the make-up in any shortfall and the removal of a secrecy provision which prevents theAustralian Tax Office(ATO) from telling a fund member when action is being taken to recover unpaid monies.
According to Sherry’s office, the average cost of guaranteeing the safety of superannuation is 30 cents per super fund member per year and this would be continued and extended to cover all scenarios under Labor’s amendments.
At present compensation for losses is restricted to cases of theft and fraud and only supplies a part payment to affected members. The existing employee entitlements protection scheme does not provide compensation for outstanding SG contributions when a business fails.
Since SG was introduced in 1987, the ATO has received more than 45,000 complaints from employees regarding insufficient employer contributions. Since November of 2002 the ATO has been owed $147 million in outstanding SG and has written off about $95 million of unpaid SG owing over a number of years.
