ke the super industry more efficient for employers, employees and super funds. The changes mean that employers will need to plan, review and update their super processes.
Why are these changes taking place?
These changes are based on the finding of the Government’s ‘Super System Review’ carried out in 2010 by Jeremy Cooper. Basically, Australia was found to have an aging population and for most people the Age Pension is not sufficient to live comfortably in retirement.
What is changing and when is it happening?
Superannuation Guarantee rates will increase incrementally from 9.0% to 12.0% by the financial year 2020. These changes begin this year from 1st July 2013, with an increase from the current 9.0% to 9.25%. The increase in contributions will continue each year until reaching a contribution level of 12% as outlined for the financial year 2019/20.
These changes are illustrated in the table below:
Super Guarantee %
2019-20 and beyond
There is also another change accompanying the increase in the Super Guarantee contributions; this is the removal of the age limit on contributions. At the moment, contributions stop for employees aged 70 years plus, this change will also take place this year from 1st July 2013.
What does this mean for Employers?
Employers will have the challenge of handling this increase in the Super Guarantee contribution and the prospect of continuing Super payments to older employees.
There are essentially two options and the choice between them is strongly determined by the approach the employer has taken or will be able to take in the future in terms of how remuneration is presented and talked about.
It is expected that, over time, employees’ wages and salaries will increase. Almost inevitably, the annual increase in the Australian minimum wage drives increases in payroll costs. With the increase in the Super Guarantee contribution, employers have two options, either;
Incorporate it in wage/salary movements, or;
Carry the increased contribution as an additional increase in the payroll cost.
However, where wages/salaries are discussed as “base plus super”, it is more difficult to incorporate the Super Guarantee contribution costs in wage/salary increases. In organisations that advertise and discuss “salary packages”, it will be easier to incorporate the increased Super Guarantee contribution in wage/salary increases. Otherwise, the increase in superannuation contributions may result in a decrease in employees’ take home pay.
Things that Employers Can Do to Prepare for the Changes to Superannuation
Employers need to start thinking about how the increased level of Super Guarantee contributions will affect their employees’ remuneration packages and the overall payroll costs. It is important to pay the correct amount of Super Guarantee; otherwise employers will have to pay the SG Charge made up of overdue SG contributions, interest and administration fees. The SG Charge is not tax deductible; however correct Super Guarantee payments on time are tax deductible.
All SDP’s clients will be ready for these reforms, as our systems and process will be automatically updated.
To ensure all employers are ready for the changes ahead, from the 1st July 2013:
Payroll systems will need to be configured to remit the increased contributions to each employee’s superannuation fund from 1st July 2013, with the software updates allowing for the annual increases through to 2019. No need for SDP’s clients to worry, as our online platform, TemPay will be updated automatically on the relevant dates;
decide how the increases will be handled, not just in 2013, but as a common practice for the following six years;
determine whether or not staff contracts need to be reviewed (which they probably will) to reflect the changes over the period to 2019 in superannuation contribution;
incorporate the superannuation costs of any employees over 70 years of age;
develop a communications plan to inform all employees of the coming increases in the Super Guarantee contribution and how the company is going to administer and incorporate them.
It is essential for all employers, to take the necessary action, as ignorance will only hinder continued successful business operations and companies will be penalised with SG Charges.
SDP’s Clients will enjoy peace of mind as we will take care of all these factors for you.
Basically we are wondering what recruiters are planning to do to accommodate this change. Any feedback would be greatly appreciated.
Thanks in advance
out the window to see who it was.
"Ben," I cried, surprised to see someone I hadn't seen in a couple years - a stone mason who had done work for me in the past, standing alongside a young man that appeared to be heading to his grandfather's (as it turned out) rim-rod straight 6'6" height.
"I've been thinking about you! You've been popping into my head lately," I said as I opened the screen door wide and signaled for the two of them to come inside. "I've been wondering if you were back in town yet" I said, knowing that he spends his past-seventy years wintering in Atlanta, avoiding the cold we have up north.
"Last week I got back. We just finished a job for the city - we put up a wall over on Compton Rd., and we was out drivin' up here to put a bid in on another job. I thought I'd stop in," he explained.
Knowing that his stop was a mixture of pleasure and business, I did not disappoint. I told him my brother had just purchased an apartment complex and needed some masonry work done on the property and I suggested he give Tom a call and gave him my brother’s number. I also told him I had had a tree fall on one of my properties that had done some walk damage and had pulled part of a stone wall down with it in one of September’s storms and could he stop by and look at it. I said it probably wasn’t more than a day’s work for two people but it might fill a hole here and there in his schedule.
We talked a bit more before we got down to that particular business above – talk that brought each of us up-to-date quickly with each other. The young man with him was one of his twenty-two grandchildren, fourteen and half of a set of twins that I remember used to ride occasionally in the truck with their grandfather. “My, how he's grown,” I remarked, as many women approaching their dotages might. Seeing the puzzled look on his face about my eighteen month old granddaughter I explained that I was raising her while her mother got it together. “It’s hard, these days,” Ben said. “These young kids have so many temptations…” echoing for me something my mother said to me before she died. “We raised two from the times they was birthed - the girl just turned eighteen and the boy is twenty-two. Their mother had a hard time of it too. But it all turned out okay,” he finished, his voice dropping low and peaceful. I felt his consolation.
About the work I had mentioned, Ben said, “Thankye’ – I’ll get right on it,” and that I know he will. Sometime today, or tomorrow, I ‘spect to get a call from Ben telling me the work is finished and what I owe him for it. Whatever he charges will be fine with me. Our friendship goes a ways back and here is how it started.
“Ben” is a stone mason from way back. I first met him when he was contracted by the City of Cincinnati to remove and haul away a street that I lived on in Mt. Lookout. I became fascinated by the removal process as the digging out of the street for its replacement unearthed about 4 feet of street levels that included large, flat stones and old cobblestones that had been used as the curbing for one of the older street incarnations. I asked the fast-moving crew one day if they minded if I did some “excavation” myself at night after they knocked off, of those beautiful granite cobblestones. (Cobblestones were often times used for ballast in sailing ships. I have no idea how they ended up here in inland Cincinnati except for the fact that the city is located on the Ohio River and was a major shipping point by water in the past.) There was one thing for sure; I was enchanted by the history and mystery of those stones coming out of the street bed.
The crew member working one of the heavy pieces of machinery that I stood at the base of hollering up into the hot mid-day sun told me I needed to talk to the “boss” and pointed me in the direction of a tall black man, giving direction to a group of laborers that appeared stymied by a part of the removal process. As I approached the huddled group intent on some problem they looked up as Ben straightened and took his cap off. I remember how tall he was and how carefully polite he was as he asked me if there was something he could help me with. I told him the malfeasance I wished to commit after his crew had departed for the day and he laughed and told me to “knock myself out,” or somethin’ akin to giving me permission to rob the city of stones that were going to be hauled away and placed into a dump site that was to become a new runway for a small local airport.
I guess he thought I would give up after the first thieving attempt, defeated and crushed under the weight of the stones. At the end of the week, as my stash of stones grew ever larger after my midnight raids, I hear a knock at my front door. Opening it I hear an engine rumbling and behind Ben standing in my doorframe and in the street is one of those big yellow scoop trucks, idling like mad, black diesel smoke scurrying away into the wind.
“The guys tell me you gotta’ be onea’ the hardest woikin’ white women they’ve ever seen. Where would you like us to dump these stones?” and lo and behold he brought more stones in three short runs with that scoop truck than I could have mustered on my own up the hill in a month. I was oh-so-grateful and offered Ben and his crew something to drink. One of the men said a nice cold beer would be great and Ben interrupted and said Cokes would do just fine. I filled a cooler with ice and Cokes and gave it to Ben, knowing without having to ask him that he would return the cooler. He did a short while later and as he stood there asked me what I was plannin’ on doing with those stones as I was in the process of “washing them down” with a hose. “If you’s gonna be plannin’ on stackin’ them stones you’d best leave that clay on ‘em,” he advised. “There ain’t no better glue to help them dry stack,” he explained. I turned the hose off.
I told him I wanted to build short walls around my flower beds and a low retaining wall across the front of my house. He told me he did that kind of work and might he give me a price to do it for me? Excitedly, because it’s my experience stone masons are very hard to come by anymore, I agreed that that would be a wonderful idea. Stone masonry is a lost art and few practice it. There’s an artist’s eye that goes into building good stonework and little did I know I had come across one such artist.
He walked around my house and in about fifteen minutes knocked again at my door. “About $800 oughtta get this done for you,” and he handed me a list of what he proposed to do, attached to a rough drawing of the layout. Flabbergasted and expecting much more, I dumbly asked if that price included all the materials. “You got all the materials here,” he pointed out. "All them stones are gonna make some beautiful walls.” I knew then that we spoke the same language. About a week later he and those stones did just that.
Why do I tell this story? I tell this story as an example of a simple business development technique that works – building on old relationships by the very simple pleasure of staying in touch. Not a lot of business gets discussed when you circle back to those who’ve been important to you in the past but the business that does get discussed is pertinent, almost each and every time.
Stop in and see someone on a Sunday afternoon. You never know what you’ll find.