Enterprise Agreements cannot restrict Superannuation Choices

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Enterprise Agreements cannot restrict Superannuation Choices

In August 2020, driven by the Federal Liberal government, the Senate passed legislation preventing unions from negotiating enterprise bargaining agreements compelling employees to contribute to a specific superannuation fund. The legislation is part of a broader agenda by the government to restrict the predominance of industry super funds, many of whom appoint industry boards heavily populated by union and employer association representatives.

The Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019, which took effect from 1 January 2021, applies to new workplace determination and enterprise agreements.

Not surprisingly, the legislation was strongly opposed by unions. As well, Industry Superannuation Australia, the peak body owned by the industry super sector, argued it did not address concerns raised by the government about underperforming superannuation funds.

A concession was obtained by independent South Australian senator Rex Patrick, which requires the Australian Prudential Regulatory Authority (APRA) to review the changes after 30 months of operation. The review by APRA must identify any `unintended consequences’ of the changes to the operation of defined benefits schemes, including examining their continuing viability and profitability.

In regard to superannuation, despite various speculation over recent years, the government has not moved to stop the legislated increase in superannuation to a minimum contribution of 10% from July 1 this year, from its current level of 9.5%.

Under the Superannuation Guarantee Charge Act 1992, further contribution increases are scheduled as per the following table:


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Schedule 1 Choice of fund for workplace determinations and enterprise agreements

Australian Taxation Office – Super Guarantee Percentage

For queries about superannuation requirements in enterprise agreements or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 WAL LAW, 0417 622 178 or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

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