February 20, 2020   |   Tips

How do I prevent returned super contributions?

More often than not, when an employee changes super fund, they forget to inform their payroll team until it’s too late.

If you are a payroll officer, you would have experienced this issue more than once and you are left with the employee’s super fund returning their super contributions due to the employee no longer being a member. The employee could have switched super fund without letting the payroll team know or has closed their account prior to the final contributions for the old fund being processed/paid.

This can cause frustration for the payroll officer who is left with additional work and for the employee as they are often left with delayed contributions.

How do you prevent this from occurring in the future?

Whilst there is no hard and fast rule to prevent this from occurring, you may be able to reduce the frequency of it happening.

A friendly reminder to all employees via an internal company announcement may be the best form of communication.

The frequency of which you pay your super contributions, i.e. each pay cycle, monthly or quarterly basis may impact when you should communicate such a reminder.

However, we suggest sending a reminder on a quarterly basis; so that you can capture any super fund adjustments that may be required to be completed within the applicable superannuation quarter.

Below are the due dates for each superannuation quarter:

MSCB

What should you include in the communication?

The communication to your employees should include the following points;

  • Payroll team notification – remind employees that they need to inform the payroll team if they have changed super fund recently.
  • Supporting documentation – Let employees know what information they need to supply to the payroll team, i.e. a completed super choice of fund form with supporting documentation of the chosen fund being compliant.
  • Check super contributions – Inform employees that before closing an old super fund account they check to make sure all upcoming contributions have been paid to prevent the delay in receiving any outstanding contributions.