Document ID: chunk:federal_register_of_legislation:F2021L01453:body:0:p2
Version: federal_register_of_legislation:F2021L01453
Segment Type: other
Provision Reference: 
Character Range: 2973–6329

From 1 November 2022 the transitional approach will no longer apply as it is expected that employers would have had sufficient time to understand and comply with the stapled fund requirements. Therefore, the Commissioner will apply the general guidelines from that time.

    General guidelines

       (7)          While all decisions are required to be made on a case by case basis, where it is evident that the circumstances are similar for a group of employees, the Commissioner will take the same approach to the choice shortfall for each employee in the group.

       (8)          The Commissioner will use the following table as a guideline when considering the initial reduction of the choice shortfall based on the employer's attempt to comply with the choice of fund requirements:

Employer's attempt to comply                                                                                                         Level of reduction  Choice Shortfall
The employer made a genuine effort to comply with the choice of fund requirements                                                    100%                0%
The employer failed to exercise the care that a reasonable ordinary person would exercise to fulfil the choice of fund requirements  75%                 25%
The employer's actions are careless and show indifference to the choice of fund requirements                                         25%                 75%
The employer knowingly decides not to comply with the choice of fund requirements                                                    0%                  100%

       (9)          After making a decision on the initial level of reduction, the Commissioner will consider whether that level of choice shortfall will be maintained, or a further reduction is warranted.

       (10)      The relevant factors when considering a further reduction include:

           (a)          the employer made a voluntary disclosure of their failure to meet choice of fund requirements

           (b)          the failure to meet the choice of fund requirements arose due to an error or honest mistake which has since been rectified and the employer is now contributing to the employee's chosen fund, or to the employee's stapled fund if no fund was chosen

           (c)           the employer has an otherwise good compliance record

           (d)          the failure to comply with choice was due to exceptional circumstances such as ill-health or impact of a natural disaster and the employer has since taken steps to comply.

       (11)      The amount of choice shortfall remaining after applying the initial level of reduction will be reduced by 20%, for any additional factors, to a minimum of nil.

       (12)      The Commissioner may not reduce the choice shortfall where the following factors apply:

           (a)          the employer, previously the subject of superannuation guarantee compliance action, is reasonably expected to be aware of their obligations, but has repeatedly not met the choice of fund requirements, or

           (b)          the employer has a history of not meeting choice requirements for other entities, or

           (c)           the employer took steps to obstruct the Commissioner from determining any superannuation guarantee or choice liability.

    New employers

       (13)