Penalties for non-compliance
If you don't meet your choice of fund obligations, you may be liable for the 'choice shortfall' – part of the Superannuation Guarantee charge.
The choice shortfall applies where you have paid Superannuation Guarantee contributions for your employee to a complying fund that is not the fund they chose.
A choice shortfall may also apply if you have not given your employees a Standard choice form in the required timeframe.
During the two-month period, an employer who demonstrates they have made a genuine effort to comply with the choice requirements will generally have any choice shortfall reduced to nil. However, penalties will not be reduced where the employer has not made any attempt to comply with the requirements of the law. These decisions will be made on a case-by-case basis.
To avoid the choice shortfall you must pay sufficient superannuation contributions to the chosen fund or, where no chosen fund exists, to the employer (or default) fund.