When you have an employee who is eligible for Choice of Fund, but they don’t nominate a fund, you need to select a MySuper default fund for SG contributions that offers a minimum level of insurance cover. Most industrial awards include a list of default funds that you can choose from.
You are required to provide new employees with a Standard Choice Form within 28 days of them starting employment. Once they have notified you of their choice of fund, you must act on it within two months.
There is no limit on the number of times an employee can ask you to change the fund into which their contributions are paid. However, you’re only required to act on the employee’s request once every 12 months.
You should keep records for at least five years of the following:
- Employees who do not have to be offered a choice of super fund
- Evidence the ‘Standard Choice Form’ has been given to all eligible employees
- Confirmation that you’ve acted on your employees’ choice of super fund
- Confirmation that the default fund chosen meets the minimum death insurance requirements set out in the legislation
Penalties apply if you don’t meet these obligations.