Choice of Fund for Members

With all the super funds out there, it's important to weigh up the factors that make up a great fund.

Excited about choosing a super fund? We didn't think so.

QIEC Super can assist you in understanding whether choice of fund applies to you? Click here to find out more.

Forms you will require to fill out:

To choose QIEC Super as your superannuation fund of choice, you should complete the Standard Choice Form.

Standard Choice Form for EXISTING QIEC Super members.

Standard Choice Form for NEW QIEC Super members.

Other Useful Links:

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

Choice of Fund - What does it mean for employees?

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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, you are covered by, you can check with your employer 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 you are eligible for Choice, and you do not choose a fund your employer must pay your SG contributions to a default fund of your employer's choosing.

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When did Choice of Fund start?

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

Does Choice of Fund apply to me?

Depending on your employment conditions, many QIEC Super members will not be affected by the new legislation.

There are certain instances in which Choice of Funds does not apply, and these are:

  • 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.

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The following will only apply to you if you are eligible for Choice under Choice of Funds.

What is your employer required to do?

Provide you with a Standard Choice Form

If your employer was required to provide you with Choice under this legislation from 1 July 2005, they must give you a Standard Choice Form within 28 days of your commencement date (if after 29 July 2005) or where your employer is a corporation and they were making superannuation contributions under a state award where choice applies only from 1 July 2006, you may request a Standard Choice Form from your employer.

Your employer is required to provide you with a form within 28 days of your request provided you are eligible for choice and you have not made a similar request in the previous 12 months.

The Standard Choice Form is the form on which you may nominate your preferred super fund. The form will also contain information on your employer's default fund, which is the fund your SG contributions will be paid into if you do not nominate a fund. In many cases, the employer fund will be the fund that your employer currently pays super contributions into on your behalf.

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What is a Standard Choice Form?

The Standard Choice Form:

  • advises that you may select your own ‘eligible fund’;
  • highlights matters that you should consider before selecting a fund;
  • provides the name of the fund into which your employer will pay your contributions if you do not make a choice;
  • advises if choosing another fund will decrease the amount of employer contributions made on your behalf.

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Pay to your nominated fund

Once you have advised your employer of your chosen fund, your employer must begin making contributions to that fund within two months of receiving your written notification.

You can only make one choice in a twelve month period unless your employer agrees to accept more frequent choices.

What happens if your employer doesn't make SG contributions to your chosen fund?
Penalties can apply if your employer fails to make SG contributions to your chosen fund.

Can your employer refuse to accept your nomination?

Yes. Your employer can refuse to accept your nomination if:

  • you don't provide all the necessary information;
  • you have chosen another fund within the previous 12 months. This 12 month period begins on the date that you first provide your employer all of the relevant information about your chosen fund;
  • the nomination is outside the 28 day time frame;
  • to contribute to your chosen fund your employer is required to become a "participating employer".

Please note: QIEC Super does not require an employer to become a "participating employer". However, sufficient details are required that will enable an employer to be set up on our computer system; such as name, address, telephone number(s) and a contact name.

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What are you required to do?

Decide whether or not you wish to choose a fund.

You are not required to make a choice. If you wish to exercise your choice you must provide your employer:

  • the full name of the fund and the fund’s ABN;
  • your account number in the fund;
  • the contact details of your chosen fund;
  • a written statement from the Trustee of the fund stating that the Fund is a complying superannuation fund;
  • written evidence that the fund will accept the contributions that your employer makes on your behalf;
  • details of any number or other unique identifier the fund may use to refer to its superannuation products (e.g. Superannuation Product Identification Number – SPIN).

You must notify your employer in writing of your preferred fund. If you are completing the Standard Choice Form that has been provided to you by your employer, this form must be returned within 28 days of your receiving it. A choice made after 28 days will not be effective unless your employer chooses to accept it.

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Which funds can you choose?

You may choose a complying super fund, scheme or retirement savings account. QIEC Super is an eligible choice fund.

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Do you have to make a choice?

You are not required to make a choice.

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What happens when you have choice, but do not use it?

If you are eligible to choose your super fund, but do not exercise that choice, one of two things can happen:

  1. If you are covered under a federal award that nominates a fund, then your employer must continue to pay contributions to that fund, in accordance with the award.
  2. If you are not covered by a Federal award, your employer may choose any 'eligible choice fund' as the default fund and your SG contributions will be paid into it.

To be an 'eligible choice fund' the fund must be a complying fund and offer 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.

Defined benefit funds can meet the insurance requirement where they provide a death benefit with a future service component that is at least equivalent to the cover shown in the table above.

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Where can you get further assistance?

The Government has initiated an education program to help employers understand their obligations under Choice of Fund. For further information, 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.

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Tips to help you make the right choice

Your superannuation is likely to be your major source of income in retirement. If you are eligible for Choice of Fund it is important that you think carefully about the choice you make.

Before you decide to change funds, look closely at the fund you are currently in. Make sure you understand your fund; refer to Member Handbooks (Product Disclosure Statement), your member statement and the Fund's website. Does your fund meet your needs; is it delivering returns you are happy with; does it offer an investment option that suits you; does it provide you with appropriate insurance cover and what fees are charged?

Is there a good reason to change funds?

  • Make sure you are given enough information to properly compare your current fund with others that you are considering.
  • Make sure you read all available information; Product Disclosure Statements, websites etc.
  • Compare the fees charged by each fund, understand the different ways fees can be calculated and deducted to work out the final dollar impact on your savings. For example do the funds charge fees as a percentage of your account balance or as a fixed dollar amount?
  • Make sure you understand any insurance cover offered; is it automatic; do you need to complete a health statement and/or have a medical check up; will you still be covered during times when you may not be working; how much are the premiums and how much cover is provided?
  • Be aware of entry and exit fees as these are not always clearly explained.
  • Be wary of sales people and financial planners offering you what seems to be a fantastic deal. Check the small print relating to commissions and find out what's in it for them.

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

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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

If you are eligible to choose a fund and QIEC Super is your choice of super fund, the following Standard Choice Form may assist you with your nomination.

Standard Choice Form for EXISTING QIEC Super members
Standard Choice Form for NEW QIEC Super members

All you need to do is add your account details to the already completed fund details and forward the form together with the compliance letter to your employer.

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