Insurance contribution amounts paid by employers to funds are generally covered by the standard, but not in all circumstances. If an employer is responsible for paying insurance amounts on behalf of an employee and this forms part of their normal payroll/contribution cycle, they must be included.
The following examples illustrate which insurance amounts are covered by the standard and which are not.
Example 1 – premium paid as part of payroll process
A fund advises an employer of the contribution (premium) amount for each employee (member). The employer records this in their payroll system against each employee. These amounts are included in the usual payroll process and paid to the fund.
The SuperStream standard applies to these contributions whether they are classified as super guarantee contributions, salary sacrifice contributions or voluntary employer contributions.End of example
Example 2 – premium paid as lump sum
An employer has agreement to pay a lump sum insurance premium to a fund for one or many employees, perhaps annually, and this occurs outside of the normal payroll process. The monies paid by the employer are receipted into the fund’s suspense or reserve account. The fund manages the allocation of the contribution and premium expense at the fund level.
The SuperStream standard doesn't apply to this payment. Lump sums are managed outside of the standard. However both parties can mutually agree to use the standard for these payments if they wish.End of example
Example 3 – premium paid by partial rollover
A member has two superannuation accounts with two different providers, one for their accumulation benefits and the other for insurance only benefits, and chooses to fund their insurance benefits by way of a periodic partial rollover deduction process.
This insurance amount is not covered by the SuperStream standard as the member has an agreement to fund the insurance cost from their superannuation account. The insurance premium expense is debited from the accumulation account through a partial rollover using the rollover standard.End of example
See also:Insurance contribution amounts paid by employers to funds are generally covered by the SuperStream standard, unless they are paid as a lump sum or partial rollover.