Choice of Fund - What does it mean for employers?

QIEC Super is determined to help you get the straight answers on Choice, so you can negotiate your way through the maze of questions and concentrate on running your business.

Advice in relation to choice for Employers:

Frequently Asked Questions

Employer Choice Brochure

ATO Guidelines for Employers

Documents to provide to your Employees:

Comparison Sheet

Standard Choice Form for NEW QIEC Super Members

Other Useful Links:

ASFA's Choice of fund fact sheets
ASIC's Super Choices booklet
Government website for Choice

Frequently Asked Questions

Click on a link below to skip to sections further down this page:

What is Choice of Fund?

From 1 July 2005 certain working Australians are able to choose which fund their superannuation contributions are paid into.

The Choice of Fund legislation applies to Superannuation Guarantee (SG) contributions made by employers on behalf of their employees.

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. From 1 July 2006, employers that are corporations and were making superannuation contributions under a state award will have to offer choice to their employees. These employees are now covered by the Federal workplace relations system under an agreement called a 'notional agreement preserving state awards'.

Some state laws also provide for choice of fund under state based arrangements. For more information, you should refer to the specific information on each State and Territory.

If you are not sure what award or industrial agreement, if any, your employees are covered by, you can check with your employer association or www.wagenet.gov.au (for federal awards and agreements and links to information on state awards and state industrial agreements), or phone the workplace relations department in your state or territory.

Although changes may be made in the future, at the moment the following employees do not have access to choice of fund:

  • Employees whose 'contributions' are made to unfunded public arrangements.
  • Commonwealth employees who are members of the CSS, PSS and employees receiving productivity benefit payments, until such time as legislation is enacted giving them choice (legislation has been introduced providing for choice by new Commonwealth employees in the accumulation division of the PSS).
  • People for whom contributions are being made in accordance with certain Workplace Agreements or certified agreements under the Industrial Relations Act or Workplace Relations Act.
  • People for whom contributions are being made under a prescribed law (such as where the contributions are made to an unfunded public sector scheme).
  • Defined benefit fund members who would still get retrenchment and retirement benefits from that fund even if their employer paid future contributions to another fund.

Eligible employees are able to choose any complying superannuation fund (which includes
QIEC Super), scheme or retirement savings account. Such funds are known as 'eligible choice funds'. If your employees do not choose a fund you must pay their SG contributions to a default fund previously chosen by you, (QIEC Super can be your default fund).

Back to top

When did Choice of Fund start?

Choice commenced on 1 July 2005 with various changes made after this date.

Back to top

What employers need to do to comply with Choice of Fund

1. Identify if you are required to offer Choice of Fund to your employees.

The first thing to do is to determine whether all or some of your employees are eligible for Choice.

Who will be eligible for Choice?

The main groups of employees that Choice of Fund will apply to are those covered by Federal awards, and staff not covered by any award or registered agreement.

From 1 July 2006, employers that are corporations and were making superannuation contributions under a state award will have to offer choice to their employees. These employees are now covered by the Federal workplace relations system under an agreement called a 'notional agreement preserving state awards'.

Who will not be eligible for Choice?

Although changes may be made in the future, at the moment the following employees do not have access to choice of fund:

  • Employees whose 'contributions' are made to unfunded public arrangements.
  • Commonwealth employees who are members of the CSS, PSS and employees receiving productivity benefit payments, until such time as legislation is enacted giving them choice (legislation has been introduced providing for choice by new Commonwealth employees in the accumulation division of the PSS).
  • People for whom contributions are being made in accordance with certain Workplace Agreements or certified agreements under the Industrial Relations Act or Workplace Relations Act.
  • People for whom contributions are being made under a prescribed law (such as where the contributions are made to an unfunded public sector scheme).
  • Defined benefit fund members who would still get retrenchment and retirement benefits from that fund even if their employer paid future contributions to another fund.

Please note: if none of your employees are eligible for Choice of Fund, then the following does not apply to you. If you need to prepare for Choice, please read on.

Back to top

2. Consider your options to specify a fund.

Is it possible for an employer to specify a fund for their employees?

Yes. The legislation provides you with an opportunity to specify a fund for your employees and limit the choice of funds in a workplace.
If you and your employees agree to specify one superannuation fund (such as QIEC Super), it may be appropriate for you to enter into an agreement with them in the form of an Australian Workplace Agreement (AWA) or single issue (superannuation) certified agreement.
Entering into an AWA requires that you and your employee agree to all conditions of employment. The Agreement must be lodged with the Office of Employment Advocate. Each type of agreement, including a variation to an existing agreement, involves its own set of processes for registration. This may involve negotiating with your employees and any relevant unions, holding a vote, the completion of statutory declarations and lodging the agreement.
For more information on Certified Agreements and AWAs, contact your employer organisation.

If you require more information, please contact QIEC Super.

Back to top

3. Choose an employer (default) fund.

If your employees are eligible for Choice, you must nominate a default fund where any employee's SG contributions will be paid if they do not choose a fund.

  • a default fund is the fund specified in the employee's Federal Award, or if a Federal Award does not apply, it is an eligible choice fund that you choose;
  • if the Federal Award does not nominate a particular fund, you are required to choose a default fund;
  • if the Federal Award nominates a number of funds, then you are required to choose one of the listed funds as the default fund.

Back to top

What is an 'eligible choice fund'?

It is any complying fund that offers life insurance cover in respect of death that is at least equal to:

Age Range Level of life insurance
20 - 34 years $50,000
35 - 39 years $35,000
40 - 44 years $20,000
45 - 49 years $14,000
50 - 55 years $7,000

Or;

  • The premium for a person under 56 years of age is at least 50 cents per week or the equivalent.

QIEC Super is an 'eligible choice fund'.

Back to top

Nominating an employer fund

If you are required to choose an employer fund, you may wish to compare fees and the fund's record of long term investment performance, as these are two things that can have a significant impact on your employees' retirement savings. You may also wish to consider other features provided to members such as insurance benefits. There are also business issues for you to consider. For example, if the majority of your employees are already in a particular fund, it may be a practical choice from an administrative point of view to choose that fund as your employer fund.

QIEC Super, which is already the default fund for many employers in the club industry, is a complying fund that provides members with automatic death and income protection insurance*. This means that if you are already paying SG contributions into QIEC Super on a regular basis, to continue your present arrangements you only need to ensure that QIEC Super is listed as the default fund on the Standard Choice Form you give your employees. This will allow you to continue sending your SG payments to QIEC Super, provided that they do not choose another fund. * Conditions apply.

To assist you in this we have provided a Standard Choice Form with QIEC Super's details already completed.

We have created a Comparison Sheet so you can compare other funds with QIEC Super.

You should be aware that, under Choice of Fund, super funds cannot provide inducements or incentives to an employer in order to become the employer's default fund or to make their employees agree to be members of the fund.

Back to top

4. Supply a Standard Choice Form to employees who have a choice.

You will need to offer Choice of Fund to your eligible employees by providing them with a Standard Choice Form.
The Australian Taxation Office (ATO) can supply you with a Choice of Fund guide and a Standard Choice Form for you to give to your employees so they can advise you of their fund choice.

You will need to provide a Standard Choice Form:

  • To all new employees, who are eligible for choice, within 28 days of them commencing employment.
  • Within 28 days of being requested by an employee, provided they haven't made such a request in the previous 12 months and provided they are eligible for choice.
  • Within 28 days where the employee has opted for the default fund and the fund is changed.
  • Within 28 days of becoming aware that a fund chosen by an employee is no longer eligible.

You are also able to provide your employees, who are eligible for choice, with a Standard Choice Form at any time.

Back to top

A Standard Choice Form must contain the following information:

  • a statement advising the employee that they can choose any super fund that is an 'eligible choice fund';
  • the name of the employer fund that you have chosen in the event that the employee does not make a choice; and
  • advise if choosing another fund will decrease the amount of employer contributions made on the employee’s behalf.

The Standard Choice Form should also highlight matters that employees should consider before selecting a fund.

As an employer, you cannot provide financial advice to employees or recommend a fund, unless you are licensed to do so.

Back to top

Do my employees need to complete the Standard Choice Form?

Your employees are not obliged to complete the Standard Choice Form. If they choose not to complete the form you should pay their SG contributions to the employer fund.

Back to top

What information are your employees required to give you?

Eligible employees must provide you with written notice of their chosen fund. This notice must contain the full name and contact details of their chosen fund, any number or unique identifier used to refer to the fund, plus written evidence that the fund will accept their contributions.

You may refuse to accept the fund chosen by your employee if they do not provide this information or if they have chosen another fund within the previous 12 months. You are obliged to accept a change of super fund from each eligible employee once every 12 months.

Back to top

What should you do once your employees have made a choice?

If your employee nominates a super fund on their Standard Choice Form or separately in writing, you need to check that it is a complying fund and that you can make contributions into that Fund. Your employee's nominated fund becomes their chosen fund two months after they provide you with notice of their choice and you must commence to pay their superannuation contributions to their chosen fund. You can elect to pay contributions earlier if you choose.

Penalties apply for employers who do not make SG contributions in compliance with the Choice of Fund legislation.

Back to top

5. Prepare your payroll and other systems to make contributions to multiple funds.

If all or some of your employees are eligible for Choice, then you may need to make superannuation contributions to a number of different funds.

You should consider how this will affect your current procedures and make any adjustments necessary to minimise any additional administration that may result from complying with Choice of Fund.

Back to top

6. Where can you get further assistance?

The Government has initiated an education program understand their obligations under Choice of Fund. For further i nformation, you can also visit the ATO's Choice of fund website at www.ato.gov.au/super or call the Super Choice Infoline on 132 864.

If you have any questions please contact QIEC Super.

Back to top

Why QIEC Super is your choice of super fund:

QIEC Super has:

  • Over $500 million in assets
  • $1.50 p.w. administration fee
  • No Entry fee
  • No contribution fee
  • Profit returned to members - No advisers commissions
  • Member investment choice
  • Income Protection - 75% of income + 10% super contribution whilst on claim*
  • Death and TPD cover up to $1,000,000*
  • Pension Products
  • Access to Members Equity Banking Products

*Conditions apply

Back to top