Choice of fund administration

Employers are required to keep records that: 

• show they have offered choice of superannuation fund to their eligible employees and provided them with a Standard choice form
• show that they have acted on their employees' choice of superannuation fund
• contain information about the employer’s fund, such as a copy of the Product Disclosure Statement (PDS).

Employers’ records must be in English and be kept in accordance with the State Records Act 2000. If an employer’s records are not in a printed form, they must be in a form that is readily accessible and easily converted into written English. 
 

Employing agencies that do not pay sufficient superannuation contributions to the chosen fund or, where no chosen fund exists, to the employer default fund, may become liable for the Superannuation Guarantee Charge, with interest and penalties in addition to the 'choice shortfall'. 

The Superannuation Guarantee Charge may be applicable when an employer pays Superannuation Guarantee contributions to a complying fund other than the fund chosen by the employee, or has not provided an employee with a Standard choice form in the required timeframe.
 

Employers will be subject to the Superannuation Guarantee charge if they impose a fee on employees for administering their choice of fund.

It is illegal for the trustee of a complying superannuation fund, or an associate, to supply or offer to supply an employer with incentives, inducements or kickbacks of any kind to encourage them to use their fund as their default fund. Employers need to take care that they are not perceived to favour one fund over another, or to provide their employees with financial advice.

Employers can provide factual information about:

• their obligations under choice of super fund;
• the agency’s default fund
• how an employee can nominate their chosen fund.

Employers should not make recommendations about:

• whether or not an employee should make a choice.
• which superannuation fund an employee should choose.
• the level of personal contributions they pay to superannuation.

These recommendations could be considered to be either general or personal financial product advice. Any person providing financial product advice is generally required by law to be licensed by the Australian Securities and Investments Commission (ASIC).

Employees may be referred to independent general information about superannuation, such as the resources listed on this website.