Under the Commonwealth Superannuation Guarantee (Administration) Act 1992 (SGAA) employers are required to make a minimum level of contributions into a complying superannuation fund on behalf of all employees. On 1 July 2002 the rate of contributions increased from 8% to 9% of salary per annum.

First State Super (FSS)
The level of compulsory employer contributions required under the First State Superannuation Act 1992 (FSS Act) also increased to 9% per annum on 1 July 2002. These contributions therefore satisfy the Commonwealth Superannuation Guarantee (SG) requirements.

The SGAA provides that employers are not required to make SG contributions in respect of earnings above a "maximum contribution base". This capping provision does not apply in the FSS Act. Employers are required to make contributions in respect of FSS members irrespective of the level of their salary, except in the case of an officer who is on a total remuneration package under which the employer cost of superannuation is required to be paid from that package. Such officers may elect not to make contributions in respect of the amount of their salary that exceeds the maximum contribution base.

An officer on a total remuneration package who has elected to be covered by a non-public sector superannuation fund instead of FSS would generally not be required to pay employer contributions on the cash component of their package that exceed the maximum contribution base.

From 1 July 2002, the Australian Taxation Office (ATO) has set the maximum contribution base at $29,220 per quarter ($116,880.00 per annum). This amount is indexed each financial year. Any enquiries regarding the maximum contribution base may be directed to the ATO on telephone number 13 10 20 or the ATO website, www.ato.gov.au .

Enquiries about contributions to FSS may be directed to Pillar Administration on 1300 650 873.

SASS, SSS and SANCS
Non-Treasury funded employers who contribute to the State Authorities Superannuation Scheme, State Superannuation Scheme and State Authorities Non-contributory Superannuation Scheme, as invoiced by Pillar Administration, also meet the SG requirements.

In general
Employers need to take account of the increase in SG contributions to 9%, along with leave loading of 1.35%, when calculating the remuneration package for non-SES job advertisements.

If an employee has elected alternative arrangements, employers will need to make sure that they satisfy their SG obligations for those employees.

Employers who fail to provide the minimum level of support are penalised by having to pay the Superannuation Guarantee Charge to the ATO.

C. Gellatly
Director-General