🇦🇺Australia

Superannuation Guarantee Non-Compliance Penalties

2 verified sources

Definition

During plan termination compliance, pension funds must ensure super contributions on eligible termination payments (ETPs) excluding non-OTE like redundancy. Errors trigger ATO audits and penalties.

Key Findings

  • Financial Impact: AUD 360,000 civil penalty per contravention; plus SG Charge (200% of shortfall + interest); typical SME shortfalls AUD 10,000+ annually[1][4]
  • Frequency: Per non-compliant termination or ATO audit
  • Root Cause: Manual misclassification of OTE vs. non-OTE in termination payments; lack of records

Why This Matters

The Pitch: Pension Funds in Australia 🇦🇺 waste AUD 360,000+ in civil penalties per contravention on Plan Termination Compliance. Automation of OTE segregation and super calculation eliminates this risk.

Affected Stakeholders

Payroll Managers, HR Directors, Pension Fund Administrators

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Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Late ETP Payment Penalties

30-45% marginal tax rate on late ETPs (vs. 15-32%); payroll tax 4.75-6.1% state rates; AUD 5,000+ per late payment[5]

Plan Termination Audit and Remediation Costs

20-40 hours/termination at AUD 150/hr (AUD 3,000-6,000); potential loss of complying status and tax concessions[2][4]

Fehlentscheidungen bei Asset-Allokation durch ungeeignete aktuariellen Annahmen

Estimated opportunity cost of 0.5–1.0% of assets per annum from suboptimal asset allocation in a AUD 100–500 million DB fund, i.e., AUD 0.5–5 million per year, cumulating to AUD 2.5–25 million over 5 years.

ALM Modeling Delays

20-40 hours per quarterly ALM review at AUD 500/hour = AUD 10,000-20,000

Poor ALM Decisions

AUD 25% excess contributions for underfunded plans (e.g., 80% funded requires 125% levered assets)

LDI Collateral Calls

AUD millions in collateral for swap MTM losses (no cash offset from liability gains)

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