Employers should be aware that employees who are eligible for super, in many cases are also eligible to choose the super fund you pay into for them. But if they aren’t eligible to choose or don’t make a choice, you must pay their contributions into your employer-nominated or default fund.
The ATO website explains further, as repeated here –
Step 1: Identify employees who are eligible to choose
When you employ new staff, check if they’re eligible to choose a super fund.
Your new employee is eligible to 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 (NAPSA);
- Employed under an award or industrial agreement that does not require super contributions;
- Not employed under any state award or industrial agreement (including contractors who are regarded as eligible employees for super purposes).
If you’re not sure what, if any, award or industrial agreement covers your employee:
- Visit the Fair Work website at fairwork.gov.au;
- Phone the workplace relations department in your state or territory;
- Check with your employer association.
From 1 July 2015:
- You don’t need to offer choice to employees on temporary working visas. Your employee retains the right to request a standard choice form from you;
- You no longer have to provide a standard choice form to employees whose superannuation fund undergoes a merger or acquisition. Employees retain the right to request a choice form from their employer should they not wish to be placed in the successor fund.
Step 2: Provide a standard choice form
You must provide employees who are eligible to choose a super fund with a Standard choice form (or equivalent) within 28 days of their start date, unless they give you details of their chosen fund first.
You don’t have to use the Standard choice form, but any alternative document must cover all the information that the Standard choice form covers.
Existing eligible employees are entitled to change their choice of fund as often as they want to, but you have to accept a new choice from them only once in any 12-month period. If your employee asks for a choice form you have 28 days to provide it.
You need to keep a copy of the completed Standard choice form for your own records for five years. You don’t have to send a copy to us or to your employee’s chosen super fund.
You also have to give an employee a Standard choice form within 28 days if you:
- Can’t contribute to their chosen fund or it’s no longer a complying fund;
- Change your employer-nominated fund and you’re paying the employee’s contributions into that fund.
Step 3: Pay into your employer default fund until the choice form is returned
If your employees don’t choose a fund or haven’t provided the necessary information, and a super contribution is due, you must make the payment for them into your employer-nominated fund by the due date.
Step 4: Act on your employee’s choice
Once an employee advises you of their choice of super fund, you have two months to start paying contributions into that fund.
You may be penalised if you don’t offer your eligible employees a choice of fund or you don’t pay their super to their chosen fund.
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