Most employees can choose their preferred superannuation fund to accumulate their retirement savings. If you don’t choose a super fund, your compulsory super contributions will be paid to your employer’s default fund or, in some cases, to a fund that you have previously established and is stapled to you as you change employment.

Who Gets to Choose? You are generally eligible to choose a superannuation fund if you are employed under:

• A federal award
• An enterprise agreement or workplace determination made on or after January 1, 2021
• A notional agreement preserving state award
• An award or industrial agreement that does not require super contributions

You are also eligible to choose a superannuation fund if you are not employed under any state award or industrial agreement. If you don’t fit into one of these groups, it’s likely that you won’t be able to choose your own superannuation fund. Ask your employer whether you can choose your own superannuation fund.

The Mechanics of Choice There is a process to follow if you wish to choose your preferred superannuation fund:

Your Employer’s Responsibilities:

• If you are eligible to choose your own superannuation fund, your employer must provide you with a standard choice form within 28 days of commencing employment.
• The employer will have a default fund for employees who don’t make a choice or who don’t make a valid choice. This default fund must be a MySuper product.

Your Responsibilities:

• Assuming you are eligible, you can complete the standard choice form to advise your employer of your preferred fund. You will need to provide:
  • The name of the superannuation fund and your membership details
  • The address, Australian Business Number (ABN), and unique superannuation identifier (USI) number of the fund
  • A letter from your super fund confirming that it is a complying fund that can accept contributions from your employer.

If you don’t provide sufficient details to your employer, or the employer cannot contribute to the fund, your compulsory employer contributions will be made to the default fund. If you change your mind on which fund you prefer in the future, you can update details with your employer, but they may only allow one change in any 12-month period.

If You Don’t Choose a Fund If you commence employment on or after November 1, 2021, and don’t choose a super fund when you are eligible to do so, your employer will pay your compulsory super contributions into a ‘stapled’ fund (if you have one). A ‘stapled’ fund is a super fund that follows you around as you change employment. Your employer will need to apply to the Australian Taxation Office (ATO) to determine whether or not you have a stapled fund. If you don’t have a stapled fund (and have not chosen a fund), your compulsory super contributions will be paid into the employer’s default fund.

Although paying super contributions to your stapled fund will prevent you from accumulating multiple accounts over your career, it might not be the best fund for your super.

Key Features – What to Look for in a Super Fund Superannuation funds offer a range of different features. It is important to compare funds and choose one that best suits your needs. Some key aspects to consider include:

• Insurance Cover: Many superannuation funds offer death, disablement, and income protection insurance. Compare premiums and cover levels between funds carefully.
• Investment Options/Performance: The range and selection of investment options can vary widely. Past performance is not a guarantee of future performance, but consistent poor performance relative to similar funds may indicate issues.
• Fees and Charges: Seemingly small differences in ongoing fees can significantly impact returns over time. Choose a fund that provides the features you desire at the lowest cost.
• Fund Services: Look for useful member websites, client service centres, education services, and other member benefits. Ensure you’re not paying for services you don’t need.
• Fund Flexibility: Ensure your chosen superannuation fund can grow with you from working life into retirement, and consider the flexibility to move seamlessly from accumulation to pension phase.

YourSuper Comparison Tool The YourSuper comparison tool is available on the ATO website or via your ATO online account. The tool helps consumers compare MySuper products (and trustee-directed products from August 2023) in terms of fees and returns. Use it to choose the most suitable superannuation product.

Your Options While you may have the option to choose a superannuation fund, you don’t need to move if you are happy with your existing fund. However, it is important to seek advice and do research to ensure you have made an informed decision.

The information contained in this article is general information only. It is not intended to be a recommendation, offer, advice or invitation to purchase, sell or otherwise deal in securities or other investments. Before making any decision in respect to a financial product, you should seek advice from an appropriately qualified professional. We believe that the information contained in this document is accurate. However, we are not specifically licensed to provide tax or legal advice and any information that may relate to you should be confirmed with your tax or legal adviser.