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 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 (i.e. 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 key 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 has over 75 years' experience, managing over $22 billion Funds under Management as at 30 April 2016 and administering the super and retirement savings of over 290,000 current and former public sector employees.
As a not-for-profit member-focused organisation, GESB offers 'value for money' products and services. Our fees are below the industry median1.
As an employer you have an obligation to pay SG contributions on behalf of all your eligible employees.
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, it would be appropriate to action an eligible employee's 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
You do not have to offer choice of fund to members of defined benefit schemes such as Gold State Super (and the Pension Scheme). Contributing members of Gold State Super are 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.