Default Super
Employers must select a default nominated super fund for employees who don’t have a chosen super fund. As an employer, you are required to select a default super fund that you will pay your employee’s super into if they:
- haven’t chosen a fund, and
- don’t have a super fund.
Why you need a default super fund
Most employees will nominate their superannuation fund for their employer to pay their super guarantee into, however, this is not the case in some instances.
You are required to have a nominated (default) super fund and pay your employee’s super into this
fund if:
- your employees don’t nominate a fund, or aren’t eligible to choose one, and
- we advise you that your employees don’t have a super fund.
You don’t need to offer a choice of super fund to some employees, but you may still need to request their normal super fund details before paying to your default fund. This includes employees that are:
- temporary residents
- covered by an enterprise agreement or workplace determination made before 1 January 2021.
You can only offer one default fund to each employee.
You give your employees the details of this fund in section C of the Standard choice form.
Selecting a fund
The super fund you nominate must:
- be a complying fund (one that meets specific requirements and obligations under super law)
- be registered by the Australian Prudential Regulation Authority (APRA) and offer a MySuper product (these are cost-effective superannuation products with a basic set of features).
Incentives
It is illegal for a super fund to give benefits to employers as an incentive to use them as their default fund.
However, it is not illegal for a super fund to give benefits to your employees as an incentive for them to choose their fund. These could include financial literacy seminars or preferential death benefits.
Author
Natasa Briffa