Your employees' choice of fund
A 'chosen fund' is the fund to which your employee chooses to have their Superannuation Guarantee contributions paid.
An employee's chosen fund must be a complying superannuation fund or retirement savings account, and must be one to which you can make contributions at the time they choose the fund.
An employee can make a choice of superannuation fund by completing Section A of the Standard choice form or by providing you with all the information set out in Section A of the form in writing.
There is no time limit for employees to choose a fund, and they may choose as often as they wish.
From the date of receiving the completed Standard choice form from the employee, you have 2 months to pay Superannuation Guarantee (SG) contributions to the employee's chosen fund.
You can start making SG contributions to the chosen fund at an earlier time if you choose.
Self-managed super funds
An employee can choose a self-managed superannuation fund as their chosen fund. If they do, they should also provide you with evidence from the Australian Tax Office (ATO) that it is a complying superannuation fund.
When an employee doesn't choose
If an employee does not choose a fund you must pay their Superannuation Guarantee contributions into your employer fund.
Funds requiring you to become a participating employer
Some superannuation funds require you to become a 'participating employer' before you can pay contributions to them. This may involve signing a contract and paying contributions less often (such as monthly or quarterly). If you agree to become a participating employer, your employee can choose this fund. If you do not agree to do this, they cannot choose it.
When you don't have to accept a choice
You need not accept an employee's fund choice if:
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Their written notice does not contain all the required information set out in Section A of the Standard choice form.
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They don't attach the relevant statements, including a statement from a complying superannuation fund or retirement savings account acknowledging that it will accept contributions from you on the employee's behalf.
You can't pass on administration fees
The legislation states that employers will be subject to the Superannuation Guarantee charge (ie a penalty) if they impose a fee on employees for implementing choice of superannuation fund.
Directors need to be offered choice
Directors are considered employees for Superannuation Guarantee purposes. They will need to be considered when you determine who is an eligible employee for choice of superannuation fund. If the director is an eligible employee for choice they will need to be provided a Standard choice form.