EmployerNews Nov 09

Contributions on unused leave payments

Some EBAs may allow various types of unused leave (such as sick leave, recreation leave or long service leave) to be paid out to the employee while they are still employed. Employers are not required to pay the 12% LGsuper contribution on these payments for unused leave to a current employee. However employers are required to pay 9% minimum contributions to meet the superannuation guarantee requirements as these payments are included in ordinary time earnings. These contributions must be submitted as “SG” or “Additional employer” contributions and should not be included with the standard 12% contribution. Employers are not required to make contributions on payments for unused leave to an employee on termination of employment.

Contributions and paid parental leave

Some EBAs are introducing paid parental leave for employees. No employer contributions (either 9% or 12%) are required to be paid on salary payments for parental leave. For superannuation purposes LGsuper will treat any period of paid parental leave similarly to leave without pay. If an employer wishes to make superannuation contributions while employees are on paid parental leave, they should be submitted as "Additional employer" contributions.

Salary sacrifice arrangements

LGsuper will accept contributions from members who salary sacrifice their 6% standard contributions (7.05882% required for Defined Benefit members).It can also accept salary sacrifice additional contributions. A salary sacrifice arrangement is an agreement between the employer and employee. The agreement should be in place prior to the employee performing the work to which the salary sacrifice relates. If you require more information regarding salary sacrifice arrangements, visit the ATO website.

Employer Online has arrived

There are now 28 councils submitting their contribution data files via our online system. The result is a more secure, accurate and efficient data collection process. LGsuper’s training team is continuing to rollout the new web-based facility and will contact councils to arrange training sessions in the coming months.

Tax File Number (TFN) requirements

Members cannot commence paying 6% contributions until they have provided council with a valid TFN. LGsuper cannot accept member contributions if it has not received a valid TFN. Additional contribution tax of 31.5% will be applied to employer contributions if no TFN is supplied.

Members benefit statements

Annual benefit statements were sent to all LGsuper members in late September 2009. A number of statements have been returned as a result of incorrect addresses. LGsuper will be in contact with councils in the coming months to update address details. Members can also update their details via LGsuper online.

Members can stay with LGsuper

Members can keep their benefit with LGsuper, even if they have left council employment. What’s more, their new employer can pay into LGsuper. Once LGsuper has been advised that a member has left council and all contributions have been received, we will write to the member to let them know their options. Whether they have a new job or not, they can keep their benefit with LGsuper.