What can you tell me about my su­per?

The Weekly Advertiser Horsham - - News -

It’s a com­mon ques­tion asked by em­ploy­ees – what should I do about my su­per­an­nu­a­tion?

If you are an em­ployer or man­ager and feel con­fi­dent of your knowl­edge of su­per­an­nu­a­tion and in­vest­ment, it can be tempt­ing to give an an­swer.

How­ever, just about any­thing help­ful you have to say will likely fall within the def­i­ni­tion of giv­ing fi­nan­cial prod­uct ad­vice, and that could land you in hot wa­ter.

The bound­aries

Fi­nan­cial prod­uct ad­vice is a rec­om­men­da­tion or state­ment of opin­ion that: • Is in­tended to in­flu­ence a per­son or per­sons in mak­ing a de­ci­sion in re­la­tion to a fi­nan­cial prod­uct or class of prod­ucts; or • Could rea­son­ably be re­garded as be­ing in­tended to have such an in­flu­ence.

The Cor­po­ra­tions Act casts a wide net. Fi­nan­cial prod­uct ad­vice can in­clude any­thing you say about: • Join­ing, or mak­ing con­tri­bu­tions to, a su­per­an­nu­a­tion fund; • Mak­ing ad­di­tional con­tri­bu­tions to a su­per fund, in­clud­ing by salary sac­ri­fice; • Rolling ac­cu­mu­lated su­per­an­nu­a­tion into or out of a fund; • Se­lect­ing par­tic­u­lar in­vest­ment or in­surance op­tions within a su­per­an­nu­a­tion fund.

The abil­ity to pro­vide ad­vice is gen­er­ally re­stricted to hold­ers of an Aus­tralian Fi­nan­cial Ser­vices Li­cence or their rep­re­sen­ta­tives. Few em­ploy­ers or their staff fall into this cat­e­gory, and giv­ing fi­nan­cial prod­uct ad­vice, even in­ad­ver­tently, could lead to pros­e­cu­tion.

What can you say?

You can pro­vide fac­tual in­for­ma­tion that does not in­clude a rec­om­men­da­tion, an opin­ion, or an in­ten­tion to in­flu­ence a per­son’s de­ci­sion re­gard­ing their su­per. This al­lows you to pro­vide in­for­ma­tion about: • Em­ploy­ees’ rights and em­ployer obli­ga­tions; • How your em­ploy­ees can tell you what su­per­an­nu­a­tion fund or re­tire­ment sav­ings ac­count – RSA – they want their su­per­an­nu­a­tion guar­an­tee con­tri­bu­tions paid into; or • The em­ployer fund into which you will pay su­per­an­nu­a­tion guar­an­tee con­tri­bu­tions if the em­ployee does not nom­i­nate a su­per­an­nu­a­tion fund or RSA.

You can also give your em­ploy­ees the Prod­uct Dis­clo­sure State­ment – PDS – of your de­fault su­per­an­nu­a­tion fund.

Just don’t pro­vide any ex­pla­na­tion of the ma­te­rial it con­tains or at­tempt to rec­om­mend the de­fault fund.

How can you help?

None of this pre­cludes you from help­ing your em­ploy­ees.

You just need to go about it the right way.

For ex­am­ple, you can re­fer em­ploy­ees to a li­censed or au­tho­rised ad­viser. Just be sure to dis­close any ben­e­fit you might gain from mak­ing such a re­fer­ral. Or, you can ask a su­per­an­nu­a­tion fund provider to make a pre­sen­ta­tion to your em­ploy­ees.

Take care, though, that you do not give the im­pres­sion of ei­ther en­dors­ing or dis­ap­prov­ing of the fund in ques­tion.

Be­ing asked for ad­vice is recog­ni­tion that your em­ploy­ees re­spect your views and knowl­edge. It can be flat­ter­ing and you might well know a great deal about su­per­an­nu­a­tion and in­vest­ment. How­ever, with­out the nec­es­sary au­tho­ri­sa­tion, you need to steer well clear of fi­nan­cial prod­uct ad­vice.

And it’s not just you who needs to be aware of these re­stric­tions. You need to en­sure your HR staff and line man­agers are also aware.

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