Default super funds¶

Sometimes a new employee does not choose a super fund. When that happens, the employer cannot simply pick any fund. The ATO sets out a clear order the employer must follow so the super still lands in the right place.

A default super fund is the fund an employer nominates for employees who do not choose one themselves. But it is not the first stop — there is a step before it.

In one line

If an employee makes no choice, the employer first requests the employee's stapled fund from the ATO, and only pays into its default fund if there is no stapled fund.

Why this matters¶

Paying super into the wrong fund can leave an employer short of its obligations and can scatter an employee's super across accounts. Following the ATO's order keeps the employer compliant and keeps the employee's super together.

What you will learn¶

What a default super fund is
The order an employer follows when an employee makes no choice
Why the default fund must be a MySuper product

Understanding the concept¶

When an employee does not choose a fund, the ATO sets out an order the employer follows.

Step one — check for a stapled fund. The ATO says the employer must request the employee's stapled super fund details from the ATO. A stapled fund is an existing super account that follows the employee from job to job. If the employee has one, the employer pays super into it. Stapling has its own lesson — see Stapled super funds.

Step two — use the default fund. Only if the ATO advises there is no stapled fund does the employer pay into its own default super fund.

There is a rule about which fund an employer can use as its default. The ATO says the default fund an employer nominates must be authorised to offer a MySuper product. A MySuper product is a simple, basic super product designed as a default option. The employer chooses the default fund in advance and lists it on the standard choice form.

So the order is: the employee's choice first, then a stapled fund, then the default MySuper fund.

For accountants & bookkeepers

The ATO ties this order to the super guarantee. If an employee has no stapled fund and makes no choice, paying into the employer-nominated (default) fund is what protects the employer from the super guarantee charge. The stapled-fund step applies to new employees from 1 November 2021; the MySuper authorisation is a condition on the fund itself, so confirm a nominated default actually offers a MySuper product before relying on it.

Example¶

Jordan hires Mia, but Mia does not fill in the standard choice form. Jordan does not guess a fund. First, Jordan requests Mia's stapled fund details from the ATO. The ATO replies that Mia has a stapled fund, so Jordan pays her super into that account. If the ATO had said Mia had no stapled fund, Jordan would then pay into the business's default fund — which Jordan chose earlier and which offers a MySuper product.

Common mistakes¶

Paying into the default fund straight away — the stapled-fund check comes first.
Nominating a default fund that does not offer a MySuper product.
Treating "no choice" as "any fund will do" — the ATO sets a strict order.
Skipping the ATO stapled-fund request for a new employee who made no choice.

How this works in myaccountant¶

In the app — myaccountant stores each employee's fund details, whether that is a fund the employee chose, a stapled fund, or the employer's default fund. Once the right fund is recorded against the employee, myaccountant pays their super to that fund when you process super.

Key points¶

A default super fund is the fund an employer uses when an employee makes no choice.
The employee's own choice always comes first.
Before using the default fund, the employer must request the employee's stapled fund.
The default fund is only used when there is no stapled fund.
The default fund must be authorised to offer a MySuper product.
Following the order helps the employer meet its super obligations.

Learn next¶

General information only — not tax, super or financial advice.

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