What does Choice of Superannuation Fund mean for employers?
The State Superannuation Act 2000 has been updated to enable Choice of Superannuation Fund (Choice). This allows employees, with some exceptions, to choose another complying super fund into which their employer Superannuation Guarantee (SG) contributions are paid.
Choice was introduced effective from 30 March 2012 to provide employees with the freedom to select their own super fund, and to encourage people to take control of what for many will be their biggest source of retirement savings.
For employers, this means you may have to pay super contributions to multiple super funds.
GESB's Choice of Fund support
To make it easier for you to fulfil your Choice obligations, GESB's Clearing House is provided free to all WA Public Sector employers where GESB is their default fund.
The GESB Clearing House allows you to pay your Choice contributions (ie where your employees have chosen their own fund, including eligible Self Managed Super Funds) simply and easily online when you pay your regular contributions via Employer Online.
Contact a member of your account management team for assistance or resources on super and choice, including step-by-step guides, reference material, training and support.
Employer default fund
An employer default fund is the fund you pay your employee's Superannuation Guarantee contributions if they do not choose a fund.
GESB is currently the default fund for most State Government employers.
GESB is WA's largest locally-based superannuation provider. We've been around for over 70 years, so we've got extensive experience managing super for our members.
Competitive super products for your employees - At GESB we keep our fees low. We do not charge entry or exit fees, there are no contribution fees and no commissions are paid to agents or financial advisers. Members have a choice of easy to understand investment plans and sound investment performance. They receive automatic insurance cover and have round-the-clock access to information about their super as well as a wide range of member services. GESB continues to be one of the best value for money funds available and was recently ranked as a Top 10 super funds in Australia.
As an employer you have an obligation to pay super guarantee (SG) contributions on behalf of all your eligible employees.
Provide a Standard choice form within 28 days of the introduction of choice or within 28 days of their start date
Once an eligible employee chooses a super fund, you have two months to arrange to pay contributions into that fund. However, as a State Public Sector employer you are generally required to submit contributions for employees on a fortnightly basis therefore would be appropriate for you to action an eligible employees choice as soon as practicable to avoid the establishment of multiple super accounts for your employees
Where an eligible employee does not choose a fund within 28 days or you have not accepted their choice of fund (e.g. incomplete or invalid application), you must start paying contributions to the default fund.
If you are currently paying Superannuation Guarantee (SG) for your employees they will be able to choose a super fund. All new employees who are eligible for SG contributions will also be able to choose a super fund.
Record keeping requirements
There are specific records you must keep to show you have offered your eligible employees a choice of super fund. You should refer to the ATO guide to superannuation.
As a WA public sector agency you will also have an obligation to keep such records in accordance with the State Records Act 2000.
You do not have to offer choice of fund to members of defined benefit schemes such as Gold State Super (and the Pension Scheme). After choice is introduced, contributing members of Gold State Super will be able to withdraw from the scheme and direct their employer to make future SG contributions to any complying fund.
Employees wishing to withdraw from Gold State Super should be encouraged to seek independent financial advice and/or contact GESB for information before making a decision.
What is a complying fund?
A complying fund is a super fund that meets specific requirements and obligations outlined in the Superannuation Industry (Supervision) Act 1993.
It is your responsibility to check whether the fund an employee has nominated is a complying fund. You can check whether a fund is complying by looking up the fund through the GESB clearing house complying fund register.