End of employment employer super responsibilities

7 November 2024

There are many reasons why an employee may cease working for you. Whether it’s due to resignation, retirement, passing away, or illness, it's crucial to understand your super responsibilities as an employer. Ensuring compliance with super obligations helps support your employees and their beneficiaries during these transitions.

Resignation

When an employee resigns, your primary responsibility is to ensure that all outstanding super contributions are paid up to the date of their departure. This includes any accrued entitlements that may not have been paid in the last pay cycle. It's essential to process these payments promptly to avoid any penalties. Additionally, you should provide the employee with a final payslip that details their super contributions up to their last working day

Retirement

In the case of retirement, the process is like resignation, but with some additional considerations. Ensure that all super contributions are up to date and paid in full, as well as any retirement benefits, they’re entitled to. It's a good practice to offer guidance or resources on how they can access their super funds and any potential tax implications.

Death

If an employee passes away, your responsibilities may extend beyond just paying outstanding super contributions, with considerations like notifying their super fund of the employee's death. It's important to manage this process with sensitivity and provide support to the employee's family during this difficult time. You may also consider whether your employee has life insurance within their super, as this provides a lump sum payment to their beneficiaries when they die.

Illness

When an employee becomes seriously ill and is unable to work, they may be eligible for Total and Permanent Disability (TPD) insurance through their super fund. As an employer, you should ensure that all super contributions are up to date. This may involve providing documentation and consulting with the super fund to facilitate the claims process. It's also important to offer support and resources to the employee during their illness.

Super on termination payments

Super isn’t required on termination payments such as redundancy payouts, unused annual leave, or long service leave. However, you must ensure that all outstanding super contributions up to the termination date are paid. This includes any accrued entitlements that may not have been paid in the last pay cycle.

Key Considerations

1. Timely Payments: Regardless of the reason for the end of employment, ensuring that all super contributions are paid promptly is crucial. Overdue payments can result in penalties and additional charges.
2. Accurate Documentation: Maintain accurate records of all super contributions and provide employees with detailed payslips. This transparency helps in avoiding disputes and ensures that employees are aware of their entitlements.
3. Communication: Clear communication with employees around their access to super benefits is important.
4. Compliance: Stay informed about the latest super laws and regulations to ensure compliance. This includes understanding the specific requirements for different scenarios, such as resignation, retirement, passing away, and illness.
5. Support: Visit our forms and fact sheets page to learn more about resources available Understanding and fulfilling your super responsibilities at the end of an employee's tenure is essential for compliance and supporting your employees.

To learn more about the AustralianSuper Business Portal and terminations feature, click here.