Date of article: 2005
Last updated: N/A

Choice of superannuation fund

What is choice of superannuation fund?

Choice of superannuation fund is a new law that commenced on 1 July 2005 that gives many employees the right to choose which superannuation fund will receive their employer superannuation contributions.

Who are eligible employees

Employers must identify which employees should be offered choice of superannuation fund and provide a Standard choice form to their eligible employees.

Generally, employers must offer choice of superannuation fund to an employee unless they make superannuation contributions for that employee under:

• a certified agreement or Australian workplace agreement; or
• a state award or industrial agreement.

Employees who are not sure whether they are under an award or industrial agreement can fund out by:

• asking their employer; or
• contacting the government agency responsible for workplace relations in their state or territory.

If employers have eligible employees as at 1 July 2005, they must give those employees a Standard choice form before 29 July 2005. Employers also need to give new eligible employees first starting after 1 July 2005 a Standard choice form within 28 days of their start date.

How it affect eligible employees

From 1 July 2005, eligible employees can choose the superannuation fund to receive their future superannuation contributions.

If an eligible employee wishes to choose a superannuation fund, they should provide their employer with all the required information on the Standard choice form.

If an eligible employee does not choose a superannuation fund, the employer superannuation contribution will be made to a superannuation fund nominated by their employer.

Employer must act on employee's choice

Once an eligible employee makes a choice of superannuation fund, the employer has two months to get ready to make contributions to that superannuation fund. After this time, any superannuation contributions made for that employee must be to their chosen fund.

The employer does not have to make superannuation contributions to the employee's chosen fund until all information is provided.

Self managed superannuation

With choice of superannuation fund, eligible employees can nominate to have their employer make contributions to their own self managed superfund.