March quarter 2011

In this issue we advise of some changes within the energy industry in NSW.

We also look ahead to the end of the current financial year and ways in which you can ensure that all contributions are remitted before the year end deadline.

In addition to this, we discuss other administration matters, as well as providing the investment returns for the quarter.

Your feedback is always welcome, so please feel free to send any comments or suggestions for future editions of this newsletter to:employerservices@eisuper.com.au

Employer Forum 2011

We’re currently in the process of organising an Employer Forum for the latter half of 2011.
We’ll keep you updated on the Forum as things develop.

Contributions and the financial year end

As this will be the last Employer Newsletter issued in this financial year, now seems like a good time to discuss contributions and the financial year end.

Contributions deadline – 11.00am, 30 June 2011

We’ll be pulling out all the stops to process all the year end contributions for inclusion in this financial year’s reporting. However, we can only guarantee that those received by 11.00am on 30 June 2011 will be processed effective this financial year.

Please remember that it’s not enough for us just to have the funds – we must also be able to allocate each contribution to members’ accounts. This means that any accompanying information, such as a contribution file, also needs to be with us by the deadline.

Unfortunately, under no circumstances will we be able to process any contributions received after close of business 30 June 2011 for inclusion in reporting for this financial year.

Remittance by mail

Our experience has taught us that you can’t necessarily rely on the postal services to provide next day delivery. This even includes express post services in some cases. Some mail deliveries, such as those from more remote locations, can take up to 5 days to arrive at our office.

So, if you’re remitting contributions by mail, please do so in plenty of time for them to reach us.

Remittance by EFT and email

Remitting contributions by EFT and email is quicker than by mail, but will only be effective if we’ve received enough accompanying information to allow us to allocate them.

Firstly, when remitting contributions via EFT, please ensure that you’ve provided your employer code in the ‘Reference’ field of your bank’s EFT software. That way, we’ll know straight away that the deposit is from you.

Secondly, please make sure that you email us a contribution file before the deadline, to allow us to allocate the amount you’ve sent to each member’s account.

The email address to use for contribution remittance advices is: employeronline@eisuper.com.au

Other administration matters

Contacting us by email

We’re currently receiving messages via the Employer Online and Employer Services email addresses with a variety of content in the subject heading. This can cause delays in the processing of your requests and the length of time it takes us to respond to your queries.

When sending emails please ensure the subject line commences with the Product Code, followed by your Reporting Centre Code. eg. EIDIVA Z99000.

Employment Termination Advice form

When an employee leaves your employment you should forward an Employment Termination Advice (ETA) to us.

This form lets us know when the employment ceased and whether or not all superannuation contributions have been paid for the employee.

We’ve been receiving some ETAs on which the section relating to the remittance of final contributions has been incomplete or left blank. Contacting you to request this information after we’ve received the form can cause delays in the payment of member benefits.

So, when you send an ETA to us and there are outstanding contributions to be made, please ensure that you let us know by answering “No” to the question “Have all contributions for this member been paid?”. You should also confirm the date on which you expect to make the final contribution, as shown in the example below:

For members of the Retirement Scheme (Division B) and Defined Benefit Scheme (Division D) you should also confirm the final amount to be remitted.

When a member of Division B or D ceases employment due to retrenchment please ensure sections 3(1) and 3(2) of the ETA are completed.

Retirement Scheme - contribution corrections

After the end of each financial year, EISS is required to report to the ATO the amounts of Concessional and Non-Concessional contributions it has received for each member during the preceding year. This is so that the ATO can assess whether or not a member has exceeded the limits set on these types of contributions and notify the member of any additional tax to be paid.

For this reason, if you need to make corrections to any previous contributions, it is important that they are made on the Employer Contribution Return Spreadsheet in the same financial year in which the contribution was made. This will prevent us from reporting incorrect information to the ATO.

So, with the current financial year end rapidly approaching, please advise us of any changes for this year as soon as you can, so that we’ll have time to make the necessary changes before 30 June.

Where you do need to make corrections for a previous financial year, as well as updating the Spreadsheet you must send an email to Employer Services to tell us of the correction and confirm the financial year to which it applies. This is so that we can report the correction to the ATO.

Contributions for those aged 70 and above - Accumulation Divisions

Under superannuation law, employers cannot make Superannuation Guarantee (SG) contributions on behalf of employees once they reach 70 years of age.

However, you can contribute other mandated contributions for employees aged 70 or above, where you’re required to do so, such as under an award agreement.

When forwarding other mandated contributions for an employee who is aged 70 or above, you should list these as ‘award’ contributions in the Employer Contribution Return Spreadsheet.

Employees aged 70 to 74 are free to make their own personal superannuation contributions from after-tax income, or via pre-tax salary sacrifice contributions.

The additional requirement for these employees is that they must have worked a minimum of 40 hours over a period of 30 consecutive days. If they fail to meet this work test, no personal contributions can be accepted for them.

So you should warn employees approaching the age of 70 that soon you will no longer be able to make SG contributions on their behalf.

Quarterly Superannuation Guarantee (SG) Contributions

Under the SG requirements all employers must contribute the minimum level of 9% of each eligible employee's earning base in super support for each financial year. The SG contribution is required to be contributed on at least a quarterly basis. From 1 July 2008, your employees' earning base is their ordinary times earnings (OTE).

The following describes the ATO deadlines for employer contributions and the penalties that may apply if employers do not meet them. EISS employers who make monthly contributions in accordance with the Scheme rules will more than satisfy these minimum requirements and will therefore avoid any of the penalties listed.

The ATO imposes penalties if SG contributions are not made by the quarterly cut-off date by applying an SG Charge (SGC)* which is made up of three parts:

• SG shortfall amounts based on Ordinary Time Earnings (OTE).

• Interest on that amount (currently 10% per annum).

• Administration fee of $20 per employee per quarter.

  If the SGC and the SGC statement are not submitted by the due date for lodgement additional penalties may apply and these are:

• General Interest Charge (GIC) from the SGC due date will be incurred. GIC compounds daily until SGC and accrued GIC are paid in full. The ATO can reduce the penalty. GIC is tax deductible in the year it is incurred.

• An amendment in the SG legislation, from 24 June 2008, means that if an employer makes an SG contribution to a superannuation fund which is late the employer can elect to have this contribution used to offset against the amount of SG charge they have to pay to the ATO for not meeting their superannuation obligations. Please refer to the ATO website for further information at www.ato.com.au

  Penalties may also apply for false or misleading statements, avoidance, failure to provide information or failure to keep SG records.

  The following table obtained from the ATO lists the standard cut-off and lodgement dates.

  Superannuation Guarantee quarter ended	Cut-off date for Superannuation Guarantee Contributions	Due date for lodgement of a SG statement and payment of the SG charge if contributions are not made on time
  1 July - 30 Sept	28 October	28 November
  1 Oct - 31 Dec	28 January	28 February
  1 Jan - 31 March	28 April	28 May
  1 April - 30 June	28 July	28 August

  * The SGC is not tax deductible and cannot be reduced by the ATO.

Contribution Caps - final reminder for this financial year

The cap on the amount of Concessional (or pre-tax) contributions members can make to super currently remains at $25,000 a year (indexed). If a member sacrifices some of their salary to make contributions to their super, those contributions as well as the 9% super guarantee and any award contributions are all counted towards the concessional contribution cap.

The transitional Concessional contributions cap (for members aged 50 and over) also remains at $50,000 for this financial year.

The annual cap on Non-Concessional or after-tax contributions remains at $150,000 per annum for the 2010/11 financial year and is calculated as six times the level of the (indexed) Concessional contributions cap.

What happens if members exceed the caps?

Employers should be aware that employees salary sacrificing may be at risk of exceeding the contribution caps and of incurring excess contributions tax. Excess Concessional contributions are currently taxed at 31.5% in addition to the standard 15% contributions tax and there are further penalties if a member also exceeds the Non-Concessional cap.

It is neither the employer's nor the fund's responsibility to monitor member contributions. To help your employees avoid any nasty surprises it's important to be conscious of the caps when setting up or adjusting salary sacrifice arrangements. It is ultimately the member's responsibility to ensure that they don't exceed the caps.

If a member requires information about the amounts that they have contributed or are unsure about how the caps work please refer them to Member Services on 1300 369 901. If they require financial advice about the caps they can speak to a FuturePlus financial planner at no additional cost by calling 1300 883 788.

Keep us up to date

We maintain a database of each of our key employer contacts. This includes SLOs, Payroll contacts, General Managers, Finance Managers and senior HR personnel.

It’s important that we’re kept informed about any changes to these contact details, so please email us at employerservices@eisuper.com.au to advise of any updates.

Also, if you’re one of our key operational contacts and are regularly receiving emailed requests from us, it’s important that we know when you’re going to be away from work for an extended period.

So if you’re going on leave it would be really helpful if you could give the Employer Helpline a call, or send an email to let us know who to contact while you’re away. Alternatively, you could let us know who to contact via your email’s Out of Office/Auto Reply facility.

Investment returns

March 2011 quarter returns for the Contributor Financed Benefit - Retirement Scheme

Strategy	Quarterly Returns
High Growth	3.2%
Growth*	3.2%
Diversified	2.9%
Balanced	2.8%
Capital Guarded	2.7%
Cash	1.2%


All figures are shown to one decimal place.
Returns may vary slightly between Divisions of the Scheme.
*Previously Trustee Selection - available to Retirement Scheme members only

March 2011 quarter returns for the Accumulation Scheme

Strategy	Quarterly Returns
High Growth	3.1%
Diversified	2.8%
Balanced	2.6%
Capital Guarded	2.3%
Cash Plus	1.0%


All figures are shown to one decimal place.
Returns may vary slightly between Divisions of the Scheme.

Contact Us

The following is a one-stop reference guide to all the relevant contact numbers and addresses through which employers can communicate with us.

Employer Helpline: 1800 636 441

Fax
All employer faxes are to be sent to: (02) 9299 9321

Contribution Return emails
All Contribution Return emails should to go to the email address: employeronline@eisuper.com.au

All other emails
employerservices@eisuper.com.au

Writing
If you are writing to us, please address the letter as follows:

Energy Industries Superannuation Scheme
PO Box N835 Grosvenor Place
Sydney NSW 1220

Website
www.eisuper.com.au