Section 6 - Information for Employers
Employers can establish an arrangement with the Trustee to make superannuation contributions for their employees to meet their obligations including Superannuation Guarantee and award obligations.
As TIC Employer Sponsored Super is a sub-plan of the Employer Sponsored Division of ISARF (which is a complying superannuation fund), employers can generally claim an income tax deduction for contributions made for eligible employees.
TIC Employer Sponsored Super does not require a minimum number of employees and sets no minimum contribution or minimum account balance requirements.
Employers can also cost-effectively tailor the features of TIC Employer Sponsored Super on a group basis to suit the specific needs of their employees.
An important benefit is the TIC Plan can also meet your employees’ changing needs. If they cease employment with you, they will not need to roll over their benefits into another superannuation fund, as they can remain as a member of TIC Personal Super. Also employees who retire or terminate employment due to incapacity can directly transfer their benefits within the Plan to start a pension under TIC Pensions.
Contributions
You may make superannuation contributions on a weekly, monthly, or quarterly basis by cheque or direct transfer.
In addition to receiving employer contributions, your employees can make personal and eligible spouse contributions as additional lump sum contributions. Your employees may also consolidate their superannuation into their TIC Employer Sponsored Super account by rolling in superannuation benefits they may have in other funds.
There are restrictions on contributions that can be accepted by a superannuation fund. Different contributions attract different tax treatment.
TIC Employer Sponsored Super cannot accept member non-concessional contributions and is required to apply a higher level of tax to concessional contributions (including employer contributions and salary sacrifice contributions) if it does not hold the member’s Tax File Number. Employers will be under heightened obligations to quote the Tax File Number of their employees to superannuation funds.
The Trustee reserves the right to take whatever steps it considers necessary or appropriate to manage ISARF’s tax liability where it does not hold a member’s Tax File Number, including rejecting concessional contributions or deducting higher taxation as concessional contributions are received.
For more detailed information about contributions and tax related issues, refer to Section 8 - Summary of the Key Tax Issues.
Investment Choice
Your employees have flexibility and control to choose an investment strategy appropriate to their needs from the simple and easy to understand investment choice offered by the TIC Plan.
Your employees can simply invest in any of a range of diversified investment options, each offering a different balance between growth and defensive asset sectors through a combination of investment managers.
The default investment option for the TIC Plan is the TIC Balanced Fund investment option. This default applies where your employees have not yet made an investment choice, or if their choice is not clear.
Insurance Options
The TIC Plan offers employers access to the TIC Employer Sponsored Super plan, providing competitive rates of insurance for your employees. Having insurance cover through their superannuation provides your employees with additional financial security in a convenient, tax and cost-effective way. Premiums are tax deductible to TIC and are deducted from member’s account balance.
The options available are:
A. Fixed amount for all your employees - Where the sum insured is fixed, every eligible member is entitled to the cover regardless of age. Premiums however vary according to age. For example, if a member has a fixed insurance of $100,000 (at the Annual Review date) and a TIC account balance of $20,000 at the claim date, then on their Death or TPD (if cover is provided) an amount totalling $120,000 is payable (i.e. $100,000 insurance plus the $20,000 account balance).
B. Multiple of salary benefit - This is where the level of cover is determined as a set multiple of salary. For example, if you have chosen to insure a member for Death & TPD of three times their salary and the member’s salary is $50,000 pa, then the insurance cover is $150,000 (i.e. 3 x $50,000).
C. Percentage of salary for each year of future service - This is where the sum insured is specified as a percentage of salary and then multiplied by the number of years and complete months of the member’s future service to age 65.
For example, if a member is 35 years of age and has 30 years until they turn age 65, has a salary of $50,000 pa and you have chosen 10% of their salary as the percentage, then the member will be insured for $150,000 (i.e. $50,000 x 10% x 30). Under this option, the amount the member is insured for changes each year as they get older and as their salary changes. For the purpose of calculating the member’s insured benefit, the Trustee reviews their age and salary information on 30 June each year.
Employers who have specified the sum insured for their plan as either one of A, B or C benefit formulas, the premiums they pay will be determined in accordance with the aged base premiums.
Automatic Acceptance Level
When an employer establishes insurance cover for its employees through TIC Employer Sponsored Super, an Automatic Acceptance Level (AAL) will usually apply depending on the number of members in the employer’s TIC Employer Sponsored Super plan. An AAL is the maximum amount of cover available without an eligible member needing to provide evidence of good health.
To be considered for any cover above the AAL, the member will need to complete the Personal Insurance Application Form.
Minimum Level of Cover
If an employer does not select insurance cover a minimum level of cover will be applied to all members who fall under the employer’s TIC Employer Sponsored Super plan.
Policy Committee
The purpose of a Policy Committee is to help your employees to understand how their plan operates and to provide a forum to express their views to the Trustee. As Trustee, we are required to make reasonable attempts to establish a Policy Committee for your plan where:
- you are contributing to TIC Employer Sponsored Super for 50 or more employees; or
- five or more employees write to us requesting that a Policy Committee be established.
A committee must include equal numbers of employee-elected and employer representatives.
The Policy Committee should meet at least yearly and, if requested, as Trustee we must arrange for a Trustee representative to attend each meeting.
Employer and Member Application
To establish a superannuation arrangement for your employees in TIC Employer Sponsored Super, you need to complete and forward to us the Employer Application Form and the Contribution Schedule, if you are sending contributions with your application.
The forms are included in this PDS. Once we receive contributions on behalf of an employee, we will provide them with a copy of this PDS, with a covering letter and a statement of the contributions received. We will send this material either to you, to provide to your employee, or directly to their home address if you have provided their address to us.
To complete their membership, your employee will need to complete and forward to us the Superannuation Member Application Form. Once we receive this we will send all correspondence about their account to the personal address they provide in their application.
Your employees can select their own investment strategy with their initial application. They can change this investment strategy at any time later. However, fees and costs may apply.
They can also apply for life insurance cover with their initial application or at any time later.