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Businesses must offer employees super fund choice, says ATO

Adrian Flores
Adrian Flores
07 September 2020 1 minute readShare

The Australian Taxation Office has reminded employers that they are under obligation to identify employees who are entitled to choose their superannuation fund and must offer them that choice.

In new guidance on its website, the ATO said employers must check if new employees are eligible to choose a super fund and, if requested, must provide them with a standard choice form within 28 days.

Further, employers need to nominate the default fund that they will pay their contributions into should the employee not choose a fund.

Employers don’t need to offer a choice of fund to employees whose super fund is undergoing a merger or acquisition or if the employee is on a temporary working visa; however, the ATO said the employee has the right to request a standard choice form.

The ATO said that while existing eligible employees are entitled to change their choice of fund as often as they want, employers only have to accept a new choice from them once in any 12-month period.

Further, employers need to keep a copy of the completed standard choice form for their own records for five years. The copy does not need to be sent to the ATO of the employee’s chosen super fund.

Once an employee advises of their choice of super fund, the ATO said employers 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,” the ATO said.

To view the full ATO guide, click here.

Businesses must offer employees super fund choice, says ATO
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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