POWERED BY MOMENTUM MEDIA
ASFA calls for SG payments to be covered by the FEG
The Association of Superannuation Funds of Australia (ASFA) has recommended that unpaid Superannuation Guarantees (SG) be included in the Fair Entitlements Guarantee (FEG) so workers’ super payments are protected if an employer becomes insolvent.
Under the FEG, the Commonwealth was required to pay an ‘advance’ on certain unpaid ‘employment entitlements’, in cases where an individual’s employment ended in circumstances connected with the insolvency or bankruptcy of their employer.
However, the types of ‘employee entitlements’ currently covered by the FEG are limited and did not include unpaid superannuation contributions.
In its pre-Budget submission, ASFA said there had been a number of recent high-profile cases including restaurant groups, where businesses had become insolvent and unable to pay their unpaid superannuation contributions.
“From the perspective of employees, unpaid compulsory superannuation contributions are equivalent to unpaid wages,” the association said.
“They are part of an employee’s remuneration and are vital for achieving dignity in retirement.”
According to the Australian Taxation Office (ATO), data from 2018-19 (the latest year for which data was available), there was about a $2.5 million shortfall in SG payments by employers.
The association estimated it would cost around $150 million per year to include unpaid SG in the FEG, with around 55,000 employees a year benefitting.
ASFA acknowledged that recent changes to superannuation reporting requirements for businesses and funds had given the ATO greater visibility into the issue and it was likely this issue would persist.
“In ASFA’s view, there is merit in reviewing the treatment of unpaid SG entitlements in insolvency/bankruptcy, with the objective of considering how to achieve the maximum possible recovery on behalf of affected employees,” it said.
Recommended for you
Governor Bullock took a more hawkish stance on Tuesday, raising concerns over Trump’s escalating tariffs, which sent economists in different directions with their predictions.
Equity Trustees has announced the appointment of Jocelyn Furlan to the Superannuation Limited (ETSL) and HTFS Nominees Pty Ltd (HTFS) boards, which have oversight of one of the companies’ fastest growing trustee services.
Following growing criticism of the superannuation industry’s influence on capital markets and its increasing exposure to private assets, as well as regulators’ concerns about potential risks to financial stability, ASFA has released new research pushing back on these narratives.
A US-based infrastructure specialist has welcomed the $93 billion fund as a cornerstone investor.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Global X GlobalX FANG+ ETF
33.51 3 y p.a(%)
2
Spire Oaktree Opportunities XI Second Close
32.68 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.62 3 y p.a(%)
4
Spire Oaktree Opportunities XI First Close USD
31.36 3 y p.a(%)
5
Fidante Credit Suisse Global Private Equity
29.60 3 y p.a(%)
