The Henry Review & Superannuation
The Henry Review, the largest review of Australia’s Tax System in over 50 years, proposed 138 reform recommendations. From these 138 reforms, the Treasurer announced on 2 May only a handful of changes would be adopted.
The tax reforms will have varying implications depending on the size of the business and the industry sector. However the reforms to be adopted in the in area of superannuation will be equally applied to all businesses regardless of size or structure.
What has changed?
- The Superannuation Guarantee rate will increase from 9% to 12% by 2020 (with staggered increases starting in the 2013-14 income year).
- The Superannuation Guarantee age limit will be extended from 70 to 75 so that eligible employees aged between 70 to 74 will be eligible to receive SG payments.
- The Government will provide a contribution of up to $500 for workers with incomes of up to $37,000.
- Australian workers aged 50+ will be able to make superannuation catch up contributions where their superannuation balances are below $500,000. From 1 July 2010 they will also be allowed to double their concessional superannuation contributions to $50,000.
How will this impact organisations?
Prior to July 2008, many organisations adopted a total reward approach* to remuneration in order to ensure that they did not incur additional costs due to changes in the definition of superable salary.
Those organisations who have adopted a total rewards approach may be in a position where they are able to deduct the additional SG requirement from existing salaries. In this scenario, the employer’s costs are not increased and the employee, whilst earning the same total package, gets more super but less take-home-pay.
Those organisations who have not yet adopted a total reward approach and manage superannuation as a separate component outside of salary, will find themselves in the position where they have to fund the additional SG amounts on top of the already existing SG liability they carry. This could mean a considerable increase in cost, especially if the organisation has chosen not to cap SG payments at the maximum contribution level.
Is your organisation prepared for upcoming changes resulting from the Henry Review? What measures are you taking to ensure your employees understand these changes and how these changes impact them? Are you planning on amending your remuneration policies and pay practices to accommodate the upcoming SG changes?
You can post your comments in our R.Network forum on LinkedIn or send us a tweet @Remesys.
* a total reward approach refers to the process where all reward components are added together to provide employees with one package value
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Innovation and the Impact on HR
A recent global study of nearly 1,600 senior executives by the Boston Consulting Group (BCG) has reported that many employers rank the need for greater innovation as a top strategic priority in 2010. The report, titled Innovation 2010: A Return to Prominence - and the Emergence of a New World Order, revealed that 72% of those employers surveyed reported innovation as a top-three priority for the 2010 year.
The report confirmed that whilst many companies may have taken a defensive stance last year during the economic downturn, in 2010, many organisations have recommitted to innovation and acknowledge its importance to their long-term competitiveness with 84% of respondents rating innovation as an important or extremely important lever in the organisation's ability to reap the benefits of an economic recovery.
The report findings also revealed that companies who had recently increased their innovation spending were more satisfied overall with the return on their innovation spending, compared to 2008/09.
Human resources teams have increasingly sought ways to streamline processes and practices, increase their efficiency and decrease their administrative work, all in an attempt to free up valuable time that can be better spent on adding value to the business. Implementing technology solutions to manage some of the more manual and time consuming HR activities is an effective strategy that is helping organisations achieve this goal.
Technology is constantly evolving and there are many software applications and tools available that cover the full range of human resource functions. Most companies now use some form of software to streamline and automate a variety of HR processes including recruitment, learning and development, performance management, HR metrics and, more recently, many organisations have implemented technology solutions to manage the company’s annual salary review process.
The salary review process has a significant impact on an organisation’s bottom line. Whilst the use of spreadsheets allows organisations to reach their destination, they make the journey a time consuming one that can often be fraught with errors, costly mistakes, limited transparency to managers and in the worst of cases, a return to the old perception of HR’s role in the business as one of an administrator.
There are many benefits that a web-based remuneration review software tool can bring to your organisation. R.Review, Remesys’ award winning remuneration system (named a winner of the 2010 Australian Business Award for Best Business Product) is a web-based system that streamlines the salary and bonus review process, providing an alternative to the cumbersome spreadsheet-based approach that many organisations still use to complete their reviews.
R.Review provides managers with secure access via a web browser to consolidated data including employee, market, budget, salary, bonus and performance data enabling managers to make informed salary and bonus decisions for their employees. R.Review provides a means to easily, accurately and consistently review and update employees’ remuneration.
More specifically, R.Review provides organisations with a number of features and key benefits. R.Review is a unique solution that:
- Decreases administrative effort and time and enables HR to focus on strategic deliverables
- Significantly reduces the likelihood of errors and significantly improves information security
- Provides a streamlined process based upon each organisation’s unique requirements
- Provides a centralised source of data
- Is extremely easy and intuitive to use
- Provides managers with a guided process to make recommendations
- Provides customised alerts and notifications
- Allows secure access anywhere, anytime
- Provides a complete and transparent view throughout the process
- Provides real-time reports in HTML, Excel and PDF
- Tracks spend to budget, compliance against guidelines and review status
- Provides an export function for additional data analysis
- Ensures that data is secure and backed up
- Can directly interface with other systems
- Requires no IT infrastructure on the client side
- Is designed, developed and supported by Remesys, a local Australian company
- Integrates directly with R.Performance our web-based performance management system and will integrate will R.Talent which will be available in January 2011
- Includes a powerful system administration toolkit, that:
- Allows for easy updating of organisation hierarchies to accommodate today’s dynamic workforce
- Provides shadow (‘impersonate’) access for administrators
- Provides a detailed audit report to track every action made in the system
- Automates salary letter generation
Organisations that adopt R.Review are adopting an award winning, innovative solution that provides them with a significant competitive advantage as their HR teams can focus on strategic management of the remuneration review process, while their management teams are provided with complete transparency.
"The implementation of R.Review, transformed efficiency of the salary and incentive review process, giving the process greater creditability in the eyes of the business and allowing the human resources team to improve their response times, service levels and value-add." Elizabeth Nunez, Director, Human Resources, Pitcher Partners.
"A material amount of time was saved by using R.Review. This allowed us to provide additional value-add to the business during the review and reduced the number of late nights, previously considered a necessary evil of a company’s review process" Glenn Cotterill, Reward and Recognition Manager, Canon Australia.
To arrange a demonstration of R.Review please contact Lara Kirschner on 0411 380 370 or
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Sydney Wine Tasting Event
R.Network, the remuneration and benefits networking group facilitated by Remesys, held its first evening event with a wine tasting and networking event in Sydney on 20th May.
The evening was enjoyable and informative. The Wine Society provided delicious food matched to beautiful wines and many helpful tips on choosing the right wines. In his presentation, our guest speaker, Ian Bendall, General Manager Remuneration & Benefits at Thales Australia provided valuable insight into Thales’ approach to the management of their variable pay program, or more specifically, short term reward. Ian’s presentation generated a number of questions and further discussion on current remuneration priorities.
We extend our thanks to our host company, The Wine Society, who provided an ideal forum for attendees to meet and discuss topics of interest. A special thanks also to our featured speaker Ian Bendall.
Remesys would also like to thank Mo Rosa, Wine Educator, who thoroughly entertained and educated attendees in her myth buster - beer is best with spicy food!
R.Network is enjoying its second successful year and Remesys will continue to hold R.Network events in Sydney on a bi-annual basis. We encourage members to shape future discussions by letting us know what you would like to see on the agenda as well as the type of event you would like to attend.
If you are interested in finding out more about R.Network or you would like to register your interest in being part of an Australian networking group for remuneration professionals, please register your interest online.You can also join R.Network on LinkedIn.
Upcoming R.Network Events
Remesys will continue to hold R.Network events in both Sydney and Melbourne on a regular basis and we encourage members to utilise our LinkedIn group to share ideas and pose questions in between R.Network events.
If you would like to find out more about R.Network, are interested in hosting an event, or you are not based in either Sydney or Melbourne but would still like to be part of an Australian networking group for remuneration professionals, please register your interest online.
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Remesys Recruitment: Are you prepared?
As the 2010 calendar year has rolled into its second half, organisations have braced themselves for the "war for talent".
We recognise that finding the best remuneration and reward specialists can be challenging and a time consuming exercise. Remesys can assist your organisation with the recruitment of remuneration and human resources specialists.
Our specialist knowledge and hands-on experience in remuneration and benefits and our established network of remuneration and reward professionals enables us to provide quality candidates with the appropriate skills and experience to meet your specific requirements, irrespective of your company size or structure.
Through Remesys Recruitment, we are able to quickly and professionally react to your recruitment needs from permanent vacancies in your remuneration or wider HR team, to placing remuneration contractors for specific fixed term projects or to meet your short term requirements.
We currently have a number of highly skilled and experienced remuneration specialists available in Sydney, Melbourne and Brisbane.
For further information please contact Lara Kirschner on 0411 380 370 or at
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