Most 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.
All iKeep Online staff familiarize themselves with the requirements in relation to employee’s choosing the fund they want their superannuation paid into. A copy of the ATO Super Choice Form, which employer’s are required to give their employees upon commencement of employment can be found at the link below. It also includes instructions for both the employer an employee.
All new employees must be given a Super Choice Form (SCF) within 28 days from when their employment commences.
For existing employees, if you have not requested them to fill in a SCF previously this should be done as soon as possible.
Employees are not required to return this SCF to you but you should follow up the employee (or ask the client to follow up if the payroll function is outsourced to our office) seven days after they have been given the form to remind them that if they want their superannuation to be paid to their nominated fund, they must complete the form.
Employees can choose a self managed superannuation fund if they wish.
Employers are only required to accept one of these forms every 12 months. I.e. the employee is only allowed to nominate one super fund every 12 months.
The Super Choice Form completed by the employee must be accompanied by a letter from the employee’s super fund advising that the fund is a complying fund.
Once completed and returned, the SCF should be filed with other documents for the employee if you are working in a client’s office or in the “Employees” section in the 1-20 folder in we manage the client in our office.
The SCF must be kept for a period of 5 years. It does not have to be lodged with the ATO.
Please note that if we do not receive a SCF form after reminding the employee to provide it (or reminding the client to follow up the employee for it if the payroll function is outsourced to our office), we will assume the employee has chosen to use your Default Superannuation Fund and superannuation for the employee will be allocated to the default fund.
Ineligibility to Choose
In a small number of situations an employee will not be eligible to choose which fund their superannuation is paid in to and therefore you will not be required to get the employee to complete the form. The link below will provide you with more information on the situations in which employees are not eligible to choose their superannuation fund.
iKeep staff are required to determine eligibility for all new and existing employees of their clients.
Default Superannuation Funds
An employer nominated fund (also known as a default fund) is the fund to which an employer pays an employee’s superannuation guarantee contributions if the employee does not choose a fund. The default super fund the employer chooses must be a complying fund and from 1 July 2008 also offer a minimum level of life insurance.
The following website can be used to determine if a fund is a complying fund:
http://superfundlookup.gov.au/
Information in relation to an employer’s responsibilities when selecting a default superannuation fund can be found at the following link:
Default superannuation fund information
What happens if no Superannuation Choice Form is received from the employee?
If no SCF is received, the employer is entitled to pay an employee’s superannuation into the employer’s default fund.
If you do not have a default fund, then your iKeep account manager will advise you of your obligations to have one and advise you of some of the well known complying funds listed below that exist. We do not recommend any particular fund, nor are we permitted to give financial or investment advice.
- Australian Super
- First State Superannuation
- Rest Superannuation
- Host Plus – for businesses in the hospitality industry
- CBUS – for businesses in the construction industry
- Media Super
