What can you tell your employees about super?

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It’s a common question asked by employees: “what should I do about my super?”. 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 very 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;
  • consolidating accumulated superannuation into or out of a fund; and
  • 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. Very few employers, or their staff, fall into this category, and giving financial product advice, even inadvertently, could lead to prosecution.

What can you talk about?

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 they want their superannuation guarantee contributions paid into; or
  • the employer fund into which you will pay superannuation guarantee contributions if the employee doesn't nominate a superannuation fund.

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 ask your superannuation fund provider to make a presentation to your employees. GuildSuper employs dedicated Business Development Consultants who can come out to your workplace and answer your employees’ questions. And, GuildSuper members have access to over the phone advice about their GuildSuper account at no extra cost. 

Being asked for advice is recognition that your employees respect your views and knowledge. It can be flattering and you may 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 that your HR staff and line managers are also aware. 

Sources: ASIC website: www.asic.gov.au Superannuation advice - What can I tell my employees about making a choice of superannuation fund? 

The information contained in this document is intended only to be a summary of the subject matter covered. This document contains general information only, it does not purport to be comprehensive, nor does it purport to provide you with legal advice. It has not taken into account your specific circumstances. You should legal advice from an appropriately qualified professional.

Guild Trustee Services Pty Limited ABN 84 068 826 728 AFS Licence No. 233815 RSE Licence No. L0000611 as Trustee of the Guild Retirement Fund ABN 22 599 554 834 (which includes GuildSuper) My Super Authorisation No. 22599554834526. Before making a decision about GuildSuper, you should consider whether the product is appropriate to your needs, objectives and circumstances. Accordingly, you should read the GuildSuper Product Disclosure Statement (PDS) before you make a decision about this product. You can get a copy of the PDS by calling 1300 361 477