Choice of Super Fund

From 1 July 2005 most employees not under registered Agreements or State Awards have the right to choose which fund will receive their superannuation guarantee contributions. This is known as Choice of Superannuation Fund.

The eligible employees who were able to choose their fund was extended from 1st July 2006 to cover employees working for corporations who previously could not choose a fund because they were employed under a State Award.  These employees are now covered under a Federal workplace agreement called a 'notional agreement preserving state awards'. 

This page summarises some of your obligations as an employer under the Choice of Fund legislation. You can obtain more information about Super Choice from the Government's Super Choice website or by calling 13 10 20. There is a separate page for employees in our Education Centre.

To meet your obligations under the new Choice of Fund legislation, you must:

• identify eligible employees
• choose a default fund for contributions
• provide eligible new employees with a Standard Choice Form within 28 days of commencement of employment
• take action on an employee’s valid Choice of Superannuation Fund within two months of receiving the details of their chosen fund.

Identifying eligible employees

Under legislation, you must offer Choice of Superannuation Fund to most employees. There are however, a number of exceptions. You will not need to offer Choice of Super to employees who are employed under:

• Registered Agreements (Certified Agreements, Australian Workplace Agreements & Enterprise Bargaining Agreements)
• State Awards*

* Changes were made to the legislation effective from 1 July 2006. From this date employers have to offer their employees a choice of fund if they are making contributions under a state award which has been brought into the Federal workplace relations system as a result of the WorkChoices reforms. These agreements are known as a notional agreement preserving state awards. For more information visit 'Impact of Work Choices' at http://www.superchoice.gov.au

If you are an employer sponsor of a particular defined benefit fund, you may not have to offer a choice of superannuation fund to employees who are members. There are also some public servants and individuals working for Government agencies who do not need to be offered choice.

If an employee is engaged under a Federal Award, you must offer choice whether or not that award requires contributions to be made to a specific superannuation fund. In doing so, you must still comply with the conditions of the Award.

Some state laws also provide for Choice of Fund under state based arrangements. If you are not sure what award or industrial agreement your employees are covered by, you can check with your employer association or online at www.wagenet.gov.au. For further information, refer to the workplace relations department in your State or Territory.

Choosing a default fund

When you select a default fund you will need to check that the superannuation fund is a complying fund and meets the insurance requirements for Choice of Superannuation Fund. LUCRF Super is a complying fund and you can download a copy of our Notice of Compliance.

Where applicable, your choice of default fund needs to be made in accordance with any limitations made by the relevant award. When you give your employees a Standard Choice Form, you must nominate a default fund on the form. You do not need to nominate the same default fund for all of your employees.

Other things to consider

When you are investigating potential default super funds, there are a number questions that you should keep in the back of your mind:

• Does the fund provide consistent long-term returns?
• Is there an adequate range of investment options?
• What are the fees and charges?
• How flexible are the insurance options?
• What services are provided to members?
• What services are provided to employers?
• How easy is it to make contributions?
• Do profits go to shareholders or to members?

• Other Documents

• Standard Choice Form for Employers

  This version of the Standard Choice Form is designed to make it easier for employers to choose LUCRF Super as their default fund.

  Download »  

• Notice of Compliance

  This notice serves as a declaration that LUCRF Super is a complying fund.

  Download »  
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