- Eligibility conditions
- Choosing a super fund
- The ATO’s Superannuation Standard Choice Form (and where to get it)
- Employer obligations
- What happens when the Superannuation Standard Choice Form is completed?
- What happens if you don’t complete the form, where does your super go?
- The bottom line
The Superannuation Standard Choice Form is an Australian Taxation Office (ATO) document that allows you to choose a super fund that your employer’s contributions will be paid into on your behalf, provided you meet eligibility conditions.
Under Australian super legislation, your employer must pay 9.5% of your ordinary time earnings into a super fund if your gross earnings are more than $450 per month. This is known as the Superannuation Guarantee (SG).
You’ll be eligible to choose the super fund they your employer’s super guarantee will be paid into if you’re in one of the three categories below:
- You’re employed under a federal award
- You’re employed under another award or workplace agreement that doesn’t require superannuation support
- You’re not employed under an award or industrial agreement. This includes contractors who are primarily paid for their labour
You’re not eligible to choose the super fund that your employer’s super guarantee will be paid into if you’re in one of the four categories below:
- You’re employed under a state award or agreement
- You’re employed under certain Australian Workplace Agreements (AWAs)
- You’re a federal or state public service employee
- You’re in a defined benefit super fund
Choosing a super fund
If you are eligible to choose your super fund, there are five potential options (though not every option is available to everyone):
- Retail funds. These are funds run by financial institutions. They’re open to anyone.
- Industry funds. These funds are generally designed for people who work in a particular industry, but some industry funds will allow anyone to join. Industry funds used to be known as not-for-profit funds, but know refer to themselves as profit-to-member funds.
- Public sector funds. These funds are generally only open to government employees.
- Corporate funds. These funds are usually only available to employees working for a specific employer.
- Self-managed super funds (SMSFs). These are funds where the member has more responsibility in terms of administration, compliance and investment decisions.
Learn more about the different types of super funds.
Most funds allow you to choose how your super contributions are invested. In general, funds offering the opportunity for higher potential investment returns have more risk, and vice versa. That’s because different types of investments have different levels of risk. For example, investments in fixed interest securities are low risk and provide low returns, compared to share-based investments which are more speculative but can provide greater returns.
Important considerations for comparing super funds include:
- Your investment goals.
- The historical performance of each fund.
- The fees charged by each fund.
At the end of this article we’ve added some links to other SuperGuide articles to help you assess your own super fund, compare super funds, and discover the best performing super funds.
The ATO’s Superannuation Standard Choice Form (and where to get it)
Your employer will likely provide you with the ATO’s Superannuation Standard Choice Form when you commence your employment with them. Alternatively, you can download it from the ATO’s website.
There is a section of this form that must be completed by you, and two others that must be completed by your employer. It’s important that you provide your tax file number on the form to take advantage of the concessional treatment of super contributions. Under Australian super law, super contributions (including the super guarantee) are taxed at 15%, up to a concessional contributions cap. If you don’t provide your tax file number on the form, your contributions (and subsequent fund earnings) may not be taxed at the concessional rate.
Nominating your SMSF
If you’re nominating your SMSF as the fund you’d like your employer’s superannuation payments to be paid into, you must provide the following information on your form:
- your SMSF’s Australian Business Number (ABN),
- your SMSF’s bank account details, and
- your SMSF’s electronic service address (ESA), which will facilitate your employer’s super guarantee payments via the ATO’s SuperStream service. This service is explained later in this article.
You must also provide an accompanying document confirming that your SMSF is regulated. This document can be obtained from www.superfundlookup.gov.au.
If you’re nominating a super fund regulated by the Australian Prudential Regulation Authority (APRA) or a retirement savings account offered by a financial institution, you must:
- Include the fund’s unique superannuation identifier (USI) on your form. This identifier can be obtained by contacting the fund or via superfundlookup.gov.au.
- Attach a letter from your fund’s trustee confirming that:
- the fund or retirement savings account is compliant with Australian super legislation, and
- that the fund is willing to accept superannuation guarantee payments from your employer.
Your employer must provide you with the details of their default super fund on the ATO’s Superannuation Standard Choice Form. This ensures that you can consider that fund as one of your options for your employer’s super guarantee payments. However, provided you’re eligible, you can choose another super fund by indicating your preference on the form. The super fund you nominate must be compliant with Australian super legislation.
Whatever fund you choose, your employer must make four superannuation guarantee payments on your behalf each financial year, provided you remain employed with them and you earn gross pay of at least $450 per month. The quarterly due dates for these employer super guarantee payments are:
- 28 January
- 28 April
- 28 July
- 28 October
Employers who fail to make their superannuation guarantee payments by the quarterly due dates are charged a penalty by the ATO. Your employer is liable for paying any penalty, not you.
Your employer must make these payments using the ATO’s SuperStream service. This allows super guarantee payments ad associated information to be securely transferred electronically between your employer, your super fund and the ATO.
What happens when the Superannuation Standard Choice Form is completed?
One you and your employer have both completed and signed the form, your employer keeps it for their records, so they can demonstrate their compliance with super legislation if/when necessary. The completed form is not sent to the ATO or your nominated super fund, though that fund is contacted as part of the process of completing the form (to confirm that they are prepared to accept the super guarantee payments that your employer is legally required to make).
Your employer will then arrange to make their super guarantee payments via the ATO’s SuperStream service. All relevant information will be reported via SuperStream, including the details of all payments made and the fund that they have been paid into.
What happens if you don’t complete the form, where does your super go?
If you don’t complete the ATO’s Superannuation Standard Choice Form, your employer will choose a super fund for you. This will most likely be the default super fund that they use for all employees who don’t request contributions be made to a specific fund.
If you meet the eligibility requirements, you can choose the fund into which your employer’s superannuation guarantee payments are paid into on your behalf. You can do this via you and your employer completing the ATO’s Superannuation standard choice form.
The following SuperGuide articles will help you assess your current super fund:
The following SuperGuide articles will help you compare super funds:
The following SuperGuide articles will help you discover the best performing super funds:
- Retirement performers! Top 30 pension funds over 5 years
- Super stars! Top 30 super funds over 5 years
- Top 10 performing super funds over 15 years (to 31 December 2018)
- Top 10 performing super funds for 2018 calendar year (and previous years)
- Looking good? New beauty parade for super funds with ‘best in show’ proposal
- Investment performance: We’re the best super fund. No, we’re the best…
- Mirror, mirror… what super fund is the best-performing fund of all?
- Top 10 performing super funds for 2017/2018 financial year (and previous years)
- Top 10 performing super funds over 10 years (to 30 June 2018)
The information contained in this article is general in nature.