ATO Interpretative Decision
ATO ID 2005/120
Superannuation
Choice of superannuation fund: Contributions made under or in accordance with a State awardFOI status: may be released
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This ATO ID has been amended in the Facts and Reasons for Decision to clarify the description of the application of subsection 32C(8) of the Superannuation Guarantee (Administration) Act 1992 on the relevant State industrial award.This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
Status of this decision: Decision Current
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Will a contribution made to a superannuation fund, as specified under or in accordance with a superannuation clause contained in a State industrial award, meet the choice of superannuation fund requirements in subsection 32C(8) of the Superannuation Guarantee (Administration) Act 1992 (SGAA)?
Decision
Yes. A contribution made to a superannuation fund as specified under or in accordance with a superannuation clause contained in State industrial award, where the superannuation clause creates a separate and enforceable legal obligation, will meet the choice of superannuation fund requirements in subsection 32C(8) of the SGAA.
Facts
The employee is employed under a State industrial award (the award).
The award contains a superannuation clause which states that federal legislation such as the SGAA governs the superannuation rights and obligations of the parties to the award.
The superannuation clause further states that superannuation contributions must be made to one of several superannuation funds listed in the award, or to a fund that complies with the legislation that governs the superannuation rights and obligations of the parties.
Reasons for Decision
The choice of fund requirements in the SGAA require employers to give eligible employees the right to choose which complying superannuation fund or retirement savings account will receive their superannuation guarantee (SG) contributions.
There are some circumstances in which an employer will not be required to offer choice to an employee. For example, an employer will not be required to offer choice to an employee where the employer is making contributions to a fund for the benefit of the employee under, or in accordance with, a State industrial award.
A contribution can be made under, or in accordance with, a State industrial award if there is a superannuation clause in the award which creates a separate and enforceable legal obligation. The making of a contribution which satisfies this obligation will meet the choice of superannuation fund requirements. Mere reference to superannuation in the award which does not require the employer to do anything will not satisfy the requirements of subsection 32C(8) of the SGAA
In the circumstances of this case, the employee is employed under a State industrial award. The award contains a superannuation clause which states that federal legislation such as the SGAA governs the superannuation rights and obligations of the parties to the award. The award further states that superannuation contributions must be made to one of several superannuation funds listed in the award, or to a fund that complies with the legislation that governs the superannuation rights and obligations of the parties.
In this situation, where the employer actually makes a contribution to a superannuation fund so listed under the superannuation clause in the award, or to one which complies with the requirements of the relevant legislation, the contributions will be regarded as having been made under, or in accordance with, the State industrial award which satisfies the requirements of subsection 32C(8). Employers making such contributions will not be required to offer choice to those relevant employees in accordance with paragraph 32NA(2)(a).
Amendment History
| Date of Amendment | Part | Comment |
|---|---|---|
| 21 November 2014 | Decision, Reason for Decision, Keywords | Updated for clarity. |
Year of income: Year ended 30 June 2005
Legislative References:
Superannuation Guarantee (Administration) Act 1992
section 32C
subsection 32C(8)
paragraph 32NA(2)(a)
Keywords
Superannuation contributions for employees
Superannuation guarantee contributions
Date reviewed: 7 August 2018
ISSN: 1445-2782
| Date: | Version: | |
| 23 April 2005 | Original statement | |
| You are here → | 21 November 2014 | Updated statement |
| 26 November 2021 | Updated statement |