1. Select a default fund.
3. Make sure each employee's choice is valid. For this, they must supply:
- their account name;
- their member number, or the fund's Super Product Identification Number (SPIN);
- fund name, contact details and ABN;
- letter from the fund confirming its complying status;
- confirmation that the fund will accept contributions for the employee, and
- method of payment required.
4. Activate each employee's choice within two months of receiving their valid request.
5. Maintain records for five years (in English) that show you have met your obligations, including evidence showing:
- your employees who are not eligible for choice;
- your default fund is a complying fund and meets insurance requirements;
- the Standard Choice form has been provided to all eligible employees;
- which super funds your employees have chosen, and
- you have made contributions to your employees' chosen super funds.
*You are also required to provide employees with a Standard Choice form within 28 days of:
- your becoming aware the employee has chosen a fund that is no longer an eligible choice fund;
- receipt of a written request by an employee for a Standard Choice form unless the form has already been given to the employee in the past 12 months, and
- your changing default fund for the employee if the employee is a member of that default fund by virtue of not having made a choice of fund.
As of 1 July 2015, you are no longer required to provide a choice form to a temporary resident employee or when superannuation funds merge. Previously, an employer that did not provide a standard choice form to employees in these situations may have been liable for the choice shortfall penalty. However, employees in these situations still retain the right to choose their superannuation fund if they wish to do so.
For more information about your responsibilities, visit www.ato.gov.au/super.
If you do not meet your super choice obligations, you will be liable for the choice shortfall. It is part of the SG Charge. The choice shortfall applies where:
- you have paid SG contributions to a complying superannuation fund for your employee, but not to their chosen fund.
- you have not given your employees a Standard Choice form within the required time.
- The choice shortfall is 25% of the value of the contributions that are paid to the wrong fund. The choice shortfall is limited to $500 for a notice period per employee. The choice shortfall is not deductible.