[ CCH Note: S 20 will be substituted by No 57 of 2025, s 3 and Sch 1 item 12, effective 1 July 2026. For application and transitional provisions, see note under s 16 . S 20 will read:

Subdivision E - Loading for failing to comply with choice of fund requirements

SECTION 20 WHEN THIS SUBDIVISION APPLIES  
20
This Subdivision applies if:

(a) an employer has an individual superannuation guarantee amount for an employee and a QE day; and

(b) the employer makes, for the benefit of the employee, one or more eligible contributions that:

(i) result in the employer ' s individual base superannuation guarantee shortfall, or individual final superannuation guarantee shortfall, for the employee and the QE day being less than what it would otherwise be; or

(ii) if the amount mentioned in paragraph (a) is nil - would have resulted in a shortfall mentioned in subparagraph (i) being less than what it would have otherwise been had the amount mentioned in paragraph (a) been greater than nil.

[ CCH Note: S 20A to 20D and Div 3 heading will be inserted by No 57 of 2025, s 3 and Sch 1 item 12, effective 1 July 2026. For application and transitional provisions, see note under s 16 . S 20A to 20D and Div 3 heading will read:

SECTION 20A EMPLOYER ' S CHOICE LOADING FOR THE QE DAY  

20A(1)
The employer ' s choice loading for the employee and the QE day is:

(a) if subsection (2) or (3) applies to some or all of those eligible contributions - the lower of:

(i) the amount equal to 25% of the total of the contributions to which that subsection applies; and

(ii) the choice loading limit for the QE day; or

(b) otherwise - nil.

Contributions made to an RSA or a fund other than a defined benefit superannuation scheme

20A(2)
This subsection applies if:

(a) some or all of the contributions mentioned in paragraph 20(b) are not made in compliance with the choice of fund requirements; and

(b) section 20D (relying on most recent Commissioner notification) does not apply to the contributions.

Contributions notionally made to a defined benefit superannuation scheme

20A(3)
This subsection applies if:

(a) some or all of the contributions mentioned in paragraph 20(b) :

(i) are notionally made as described in subsection 18A(3) to a defined benefit superannuation scheme; and

(ii) if paragraph 32C(2)(c) were disregarded - would not have been made in compliance with the choice of fund requirements if they had been actually (rather than notionally) made to the scheme; and

(b) none of subsections 20B(2) , (3) and (4) apply to the employer for the employee, the scheme and the QE day; and

(c) section 20D (relying on most recent Commissioner notification) does not apply to the contributions.

Note:

Paragraph 32C(2)(c) is a requirement for a fund to include a MySuper product.

SECTION 20B DEFINED BENEFIT SCHEMES - CERTAIN CASES WHERE MEMBERS CANNOT CHOOSE ANOTHER FUND  

20B(1)
This section applies for the purposes of paragraph 20A(3)(b) .

Scheme in surplus

20B(2)
This subsection applies if:

(a) the employee was a defined benefit member of the fund immediately before 1 July 2005 and has not ceased to be such a member during the period (the membership period ):

(i) starting on 1 July 2005; and

(ii) ending at the end of the QE day; and

(b) an actuary has provided a certificate in accordance with regulations under the Superannuation Industry (Supervision) Act 1993 stating that the employer is not required to make contributions for a period including the QE day, and there has been such a certificate covering all times since 1 July 2005; and

(c) an actuary has provided a certificate stating that, in the actuary ' s opinion, at all times during the membership period there is a high probability that the assets of the scheme are, and will be, equal to or greater than 110% of the greater of the scheme ' s liabilities in respect of vested benefits and the scheme ' s accrued actuarial liabilities.

The certificate under paragraph (c) must have been provided no earlier than 15 months before the QE day.

Member has accrued maximum benefit

20B(3)
This subsection applies if, on the QE day, the defined benefit that has accrued to the employee will not increase other than:

(a) as a result of increases in the employee ' s salary or remuneration; or

(b) by reference to accruals of investment earnings; or

(c) by reference to indexation based on, or calculated by reference to, a relevant price index or wages index; or

(d) in any other way prescribed by the regulations.

Member ' s benefit not affected

20B(4)
This subsection applies if the employee would be entitled, on the employee ' s retirement, resignation or retrenchment, to the same amount of benefit from the defined benefit superannuation scheme, whether or not the employee had contributions:

(a) for the QE day; and

(b) made by the employer for the benefit of the employee;

to a fund (within the meaning of Part 3A ) other than the defined benefit superannuation scheme.

Meaning of scheme ' s accrued actuarial liabilities and scheme ' s liabilities in respect of vested benefits

20B(5)
In this section:

scheme ' s accrued actuarial liabilities
, at a particular time, means the total value, as certified by an actuary, of the future benefit entitlements of members of the scheme in respect of membership up to that time based on assumptions about:

(a) future economic conditions; and

(b) the future of matters affecting membership of the scheme;

being assumptions made in accordance with applicable professional actuarial standards (if any).

scheme ' s liabilities in respect of vested benefits
, at a particular time, means the total value of the benefits payable from the scheme to which the members of the scheme would be entitled if they all voluntarily terminated their service with their employers at that time.

SECTION 20C LIMIT ON CHOICE LOADING FOR THE QE DAY  

20C(1)
The choice loading limit for the QE day (the current QE day ) is $ 1,200.

20C(2)
However, this amount is reduced (but not below nil) by the amount equal to 25% of the sum of any other eligible contributions:

(a) made by the employer for the benefit of the employee; and

(b) to which subsection 20A(2) or (3) applies for any earlier QE day for the employer and employee during the notice period that includes the current QE day.

20C(3)
In this section:

notice period
means the period:

(a) beginning on the latest of:

(i) the day the employee ' s employment with the employer starts; and

(ii) the day after the end of the immediately preceding notice period for the employer and the employee; and

(iii) 1 July 2026; and

(b) ending on the day the Commissioner gives the employer written notice that the employer ' s notice period for the employee has ended.

SECTION 20D RELYING ON MOST RECENT COMMISSIONER NOTIFICATION  
20D
This section applies to an eligible contribution for the benefit of the employee that is not made in compliance with the choice of fund requirements if:

(a) the employer attempts to make the contribution at a particular time; and

(b) at that time, there is no chosen fund for the employee; and

(c) at that time, the most recent notification to the employer:

(i) by the Commissioner; and

(ii) relating to a request by the employer (or by the employer ' s agent) for the Commissioner to identify any stapled fund for the employee;

is that the Commissioner is satisfied that the fund is the stapled fund for the employee; and

(d) the fund does not accept the contribution from the employer for the benefit of the employee; and

(e) the employer made the contribution to another fund for the benefit of the employee.

Division 3 - Arrangements to avoid paying superannuation guarantee charge