Many employees can choose which super fund their employer superannuation contributions are paid into.
The option to choose a super fund under the superannuation guarantee started on 1 July 2005. Choosing a super fund was also extended in July 2006 to employees working for corporations under former state awards.
As an employer, there are three steps you need to follow, in order to meet your obligations, when a new employee starts work.
Step 1: Identify your new eligible employees
Not everyone is eligible to choose a super fund. It generally depends on the type of award or industrial agreement that you employ them under.
If you don’t have any eligible employees, you don't need to do anything further.
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When you employ new staff you need to check their eligibility.
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Who is eligible to choose a super fund?
Your employee can generally choose their super fund if they are:
- employed under a federal award
- employed under a former state award, now known as a ‘notional agreement preserving state award’
- employed under another award or agreement that doesn’t require superannuation support, or
- not employed under any state award or industrial agreement (including contractors paid principally for their labour).
Who is not eligible to choose a super fund?
Your employee may not be eligible under the superannuation guarantee to choose a super fund if:
- you pay superannuation for them under a state award or industrial agreement or under certain workplace agreements, including an Australian Workplace Agreement (AWA) and collective agreements (although choice can also be provided under these awards or agreements), or
- they’re in a particular type of defined benefit fund or they’ve already reached a certain level in a defined benefit fund.
Some federal and state public sector employees are also excluded from choice of superannuation.
If you are not sure what award or industrial agreement, if any, an employee is covered by:
- visit the WageNet website at www.wagenet.gov.au or
- phone the workplace relations department in your state or territory.
Step 2: Provide a Standard choice form to new employees who are eligible to choose a super fund
If you have a new employee who is eligible to choose a super fund, you should provide them with a Standard choice form (NAT 13080) within 28 days from the day they started working for you.
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They are not required to complete the form if they don’t want to nominate a fund, but you do have to give them the choice if they are eligible.
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If your employee does not choose a fund, you must pay the superannuation contributions for that employee into the fund you have identified as your employer nominated fund (also known as your default fund).
You also have to provide a Standard choice form within 28 days if:
- an existing eligible employee asks you for a form
- you are unable to contribute to an employee’s chosen fund, or it is no longer a complying fund, or
- you change your employer nominated fund.
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Make sure the Standard choice form includes your employee’s tax file number so that any contributions you pay are not returned to you by the super fund.
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How do I obtain a copy of the Standard choice form?
You can download our Standard choice form (NAT13080) or you can order a form by phoning the publications ordering service on 1300 720 092 (and quoting NAT number 13080).
Step 3: Act on your employee’s choice
Once an eligible employee chooses a super fund, you have two months to arrange to pay contributions into that fund. After this time, any superannuation contributions must be paid to their chosen fund.
You need to start paying superannuation contributions to your employer nominated fund, if:
- an employee does not choose a fund within 28 days, or
- you have not accepted their choice of fund because they have not yet provided all the information you need.
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From 1 July 2008, your employer nominated fund must offer minimum life insurance for members.
If you don’t meet your obligations, including paying your employee superannuation contributions to the correct fund, you may face penalties – see Are there penalties for failing to comply?
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Last Modified: Tuesday, 11 August 2009
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