Employee choice of fund¶

Most employees can choose the super fund their super is paid into. When someone starts a new job, the employer must offer them the chance to pick a fund. The employee tells the employer which fund they want, and the employer pays their super into it.

The ATO explains that this is called choice of fund. It gives an employee control over where their super lands, so they can keep it in one place instead of opening a new account every time they change jobs.

Why this matters¶

If you are an employer, offering choice is a legal duty, not an optional courtesy. If you are an employee, it is your right to say where your super goes. Getting this step right at the start of a job keeps super in one account and avoids extra fees on forgotten accounts.

What you will learn¶

• That most employees can choose their own super fund
• The employer's duty to offer a standard choice form
• How an employee nominates a fund

Understanding the concept¶

When a new employee starts, the employer must find out where to pay their super. The ATO says the employer offers eligible employees a choice of fund by giving them a superannuation standard choice form (or an equivalent). The ATO notes this must be done within 28 days of the employee's start date.

The standard choice form works two ways. The employee uses it to tell the employer which fund they choose. The employer uses it to tell the employee the employer's own default fund, in case the employee does not choose one.

Not every worker is eligible to choose. The ATO explains that some employees covered by certain state awards or industrial agreements may not have a choice. For most employees, though, choice applies.

One important limit: the ATO says an employer must not recommend a fund or influence which fund an employee picks. The choice is the employee's alone.

If the employee does not choose a fund, the employer follows a set order instead. That order is covered in the sibling lesson on default super funds.

Example¶

Mia accepts a job with Jordan, a small-business owner. On Mia's first week, Jordan gives her a superannuation standard choice form. Mia already has a super account from an earlier job, so she fills in that fund's details and hands the form back. Jordan records Mia's chosen fund and pays her super into it. Jordan is careful not to suggest which fund Mia should use — the choice is entirely Mia's.

Common mistakes¶

• Not offering the choice form at all — the ATO treats offering choice as a duty.
• Leaving it too late — the ATO expects the form within 28 days of the start date.
• Recommending a fund to the employee — the ATO says the employer must not influence it.
• Assuming choice means no fallback — if the employee does not choose, a set order applies.

How this works in myaccountant¶

Key points¶

• Most employees can choose the super fund their super is paid into.
• The employer must offer eligible new starters a standard choice form.
• The ATO expects the form within 28 days of the start date.
• The employee nominates a fund on the form; the employer pays into it.
• The employer must not recommend a fund or influence the choice.
• If the employee does not choose, a set order applies instead.

Learn next¶

• Default super funds
• Stapled super funds
• Changing super funds

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