Govt to take on States over choice
The Federal Government will move to override state laws in order to give employees on state based employment awards the option to choose their own superannuation fund.
With choice of fund rules to apply to most other employees from July 1, 2005, the Government said it would introduce legislative amendments that would allow it to overrule the states and offer those on state awards choice from July 1, 2006.
Assistant treasurer Mal Brough outlined the move today while releasing the regulations that outline in detail the workings of the choice of fund legislation.
The regulations describe the standard choice form employers have to provide employees, the fee disclosure requirements for superannuation and managed investment products under choice and the minimum level of insurance cover that will have to be provided by default funds.
The regulations require default funds to offer insurance at a premium of at least $0.50 per week, or according to an age specific benefit scale. A 23-year-old employee, for example, would have to be offered a minimum of $50,000 in death cover under the aged based scale for the fund to comply with the regulations.
Brough said the Government was gearing up for a major public education campaign in the lead up to choice of fund, costing $19.7 million over two years.
“Today’s announcement provides certainty for the superannuation industry and paves the way for the Government to embark on a comprehensive community education campaign from mid April,” he said in a statement.
“The campaign will focus on helping businesses and employees to understand what choice will mean, and how to meet their obligations.”
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