What are modern awards?

Modern awards are a set of industry or occupation based arrangements that outline minimum wages and conditions to which certain employees are entitled. From 1 January 2010, 122 modern awards replaced 1,560 federal and state level awards. 


Generally each modern award includes a list of super funds. Employers operating under a modern award must select one of these as their default fund. Employers must pay Super Guarantee (SG) to this default fund for employees covered by the award who are not eligible or who do not choose their own super fund. If an employee covered by the award has chosen their own fund, their employer must generally start to pay the employees’ SG contributions to their chosen fund after two months (see Choice of Fund).

 

The Fair Work Commission (FWC) is currently in the process of reviewing the super funds named in each award. Once the review for a particular award is complete, employers will have to choose a new default super fund for employees covered by that award if their current default fund is no longer listed in the award. Employers will then have to direct future contributions to the newly chosen default fund.

 

Temporary grandfathering arrangements

Grandfathering arrangements allow for employers who commenced their default super fund before 12 September 2008 to continue to contribute to their fund even if it is not named in an the modern award. Once the FWC completes the review of funds named in each award, the current grandfathering arrangements will be removed.


You can meet your super obligations by continuing to contribute to a BT fund for a particular employee if one of the following conditions is satisfied:

  1. The BT super fund is named in the modern award relevant to the employee, or is permitted under temporary grandfathering arrangements that currently apply (as above).
  2. The BT super fund is named in the Enterprise Agreement (EA) covering the employees.
  3. The employee is not covered by modern awards as they are paid a guaranteed amount that is more than the high income threshold ($133,000 per annum for 2014/15, indexed annually and pro-rated for part-time employees).
  4. The employee has given you a Standard Choice form nominating the BT super fund as their chosen fund.


BT has been actively involved in the current awards selection process in order to minimise potential disruption to our clients.  We have submitted an application to the Fair Work Commission (FWC) for each of our employer super funds to be included for consideration as a default super fund in all awards. Existing BT employers can support BT’s application by submitting a letter to the Fair Work Commission.

 

Employers will have an opportunity to support their existing BT super fund as part of the FWC two-stage review process.  Please contact your Relationship Manager or call us on 132 135 as soon as possible to discuss the preferred way of providing that support.

 
  1. You will need to spend time and money selecting a new default fund listed in the revised modern award.

  2. There will be costs associated with transitioning to the new default fund including terminating existing arrangements, completing paperwork, communicating to employees, establishing new fund membership and commencing contributions to a new fund.

  3. Your Automatic Acceptance Limit (AAL) and/or other conditions apply to the insurance cover offered by your BT Super fund may change, particularly if the total number of members in the fund reduces.

  4. If you are using BT Online Employer (BTOE) service to help you meet your SuperStream responsibilities, you will need to find another SuperStream service to help you comply.

 

  • Employees will potentially have multiple super accounts leading to increased administration and paperwork.

  • Potential loss or reduction of insurance cover for employees could occur (see above).

  • If the new default super fund’s Automatic Acceptance Limit (AAL) is below the employee’s current level of insurance cover and they wish to apply for additional cover in the new fund, medical checks may be required.

 

  • Superannuation terms included in enterprise agreements approved before 1 January 2014 remain valid.

  • For enterprise agreements approved from 1 January 2014, employees may collectively select funds that offer a My Super product (or are a defined benefit scheme or an exempt public sector superannuation scheme) to be named as default super funds in the enterprise agreement with the cooperation of their employer.

  • To avoid being restricted in your choice of default super funds and to select a particular fund with your employees, you can consider entering into an enterprise agreement.  The agreement must meet the Better Off Overall Test relevant to all aspects of the modern award and be approved by the FWC.

New Employees?

Remember to offer your new employees a Standard Choice form as soon as they start.

Learn more

Speak to a BT Consultant

We can answer any questions you may have about your responsibilities as an employer or about BT Super.

Call us on 132 135

Keep up to date

Employers are responsible for keeping up to date with changes to modern awards

Visit fairwork.gov.au