Retirement income entities: Definition of standard employer-sponsor

Is a particular company a standard employer-sponsor of the self managed superannuation fund in accordance with subsection 16(2) of the Superannuation Industry (Supervision) Act 1993 (SISA)?

No, the company does not meet the definition of a standard employer-sponsor under subsection 16(2) of the SISA as the company does not provide superannuation contributions to the superannuation fund pursuant to an arrangement between the trustee and the employer.

The trustee of a self managed superannuation fund (SMSF) was an employee of a public company. The trustee did not hold a position as a director in the company.

There was an arrangement between the trustee in their capacity as an employee and the public company as the employer to have the superannuation guarantee contributions placed into the SMSF. The trustee of the SMSF states that he/she was not acting in his/her capacity as trustee when requesting this, but as an employee. The SMSF purchased convertible notes from the public company.

An employer-sponsor under subsection 16(1) of the SISA is an employer who contributes to the superannuation fund for the benefit of a member. A standard employer-sponsor under subsection 16(2) of the SISA is an employer that contributes pursuant to an arrangement between the trustee of the superannuation fund and the employer-sponsor. The only arrangement that was entered into between the public company and the trustee consisted of an arrangement between an employee and their employer in relation to the depositing of superannuation guarantee contributions. The trustee was not acting in his/her role as the trustee of the SMSF, but in their capacity as an employee. Therefore, the public company is not a standard-employer sponsor.