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  1. #1
    Join Date
    Feb 2011
    Posts
    22

    Default Superannuation changes

    Hi,
    With the upcoming changes to Superannuation I was wondering what other companies are doing in relation to the new super contributions?
    Our contracts state that salaries are inclusive of super therefore we are not contractually obliged to increase base salaries, rather make adjustments.
    But understandable by 2019 when itís gone up to 12% employees will look for base to be adjusted accordingly.

    What are other companies plannAre companies
    A) Plan to increasing base salaries with effect July 2013 and so on.
    B) Will look at making adjustment in later salary reviews taking into account Super increases.
    C) Super changes are outside of company control therefore employeeís need to accept drop in net earnings, increase in Super earnings.

    And how are you dealing with the communication to staff?
    A) Letting staff know how it individually effects them.
    B) Letting staff know itís coming in with effect from July - generic email to all staff.
    C) Not saying anything to staff, itís a government driven scheme and information is being provided by media etc.

    Thank you for your inputs Ė Iím a HR professional working remotely supporting our Australian staff so donít have as much ear to the ground knowledge.

    Thanks
    G

  2. #2
    Join Date
    May 2010
    Location
    Melbourne
    Posts
    151

    Default

    Glen,

    First of all you are ahead of most companies in that you have a contract that actually states it. Most companies I've worked for in the past are not specific in their contracts and I can see over the next 6 years a few disputes over not being paid correctly coming up over this issue.
    The company I am currently with is going to wear the cost, however our contracts (when in place) state base + super so they don't have much choice. Haven spoken to a few colleagues working for other companies that work on TEC or package are going to take this into account in future increases, to a varying degree after consultation on market rates (which I think should be best practice)
    I'd also be communicating the change to the staff as well, be up front and honest on the good and the bad and fewer problems in the future. It's unlikely that annual merit reviews will fall on 1 July when the super change comes in so best to tell affected employees before 1 July what actions the company will be taking

  3. #3
    Join Date
    Apr 2012
    Posts
    192

    Default

    Great you already have your contracts stating overall figure includes the SGC contribution. There appears to be a general overlook of the fact that this super us a) not a company initiated payment but a government impost on businesses and b) that it is in fact extra money they receive. Super isn't talked about enough in my view and more need to understand this is an important contribution to their retirement funds.

    As Cottoneyes suggests, there will be a mix going forward and I agree that for those organizations who have not been smart in this area, there are likely to be issues because employees' expect their 'cash' income to increase. This is where more communication is needed.

    Reality for a lot of businesses is that we are in a kind of downturn and many will not be able to find the extra funds to pay this additional super. Factoring it in to any intended salary increases is definitely the go. So if this year you plan on giving 3%, then then .25% of the 3% goes to super and they receive the remaining 2.75% in their take home. There will be complaints but reality is companies may not be able to afford it.

    The message now to all organizations should review the wording of your employment contracts to make sure remuneration an all inclusive figure to absorb the increasing super over the next few years.

    As to how you communicat, I say be proactive and however you communicate with your staff (newsletters, notice boards, email or toolbox meetings) prepare a statement informing them of the latest government initiative and how your particular business will be treating this. Make sure it gets to everyone in advance of the first pay next financial year so they understand how to check this in their Pay Advice Slips.

    Tiger

  4. #4
    Join Date
    Jul 2013
    Location
    Brisbane
    Posts
    12

    Default

    Here is an article. Seems to be it all depends on how their contracts are worded

    Can employers absorb superannuation guarantee increases? - Employment and HR - Australia

  5. #5
    Join Date
    Apr 2012
    Posts
    192

    Default

    Quote Originally Posted by samfordtemp View Post
    Here is an article. Seems to be it all depends on how their contracts are worded

    Can employers absorb superannuation guarantee increases? - Employment and HR - Australia
    A year on since this topic was initiated and I've observed two methods of handling. A global company whose remuneration is all inclusive ie they offer a total amount and it is up to individual employees how they structure that total in terms of cash, super, novated leasing etc., will not be paying more with the super increase. Another small operation will pay the addition .25% and one local council I'm aware of will also pay the .25% extra. So as suggested, it will probably be down to how your remuneration is structured ie cash + super or total amount.
    I suspect there will be a few companies who decide to word employment contracts differently going forward so we may see less of the cash+ super approach.

    Tiger

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