Choosing a default fund for your employees

Employers are required to make regular Superannuation Guarantee (SG) contributions for their eligible employees into a complying super fund.

When you take on a new staff member, you generally need to offer them the opportunity to choose the fund you pay into.

If they don’t make a choice but they have a stapled super fund provided to you by the Australian Taxation Office (ATO), that’s where you must make contributions.

If the employee doesn’t choose a super fund and has no stapled fund, your chosen default super fund steps in.

What is a default fund?

As an employer, you need to choose a super fund to accept the contributions you owe your staff that you can’t pay to their chosen fund or stapled fund.

You select your default when your business employs someone for the first time and you can choose a new default if you’re not happy with your current arrangements.

If you’re changing your arrangements, you must provide employees using your current default fund with a superannuation standard choice form. This gives them the opportunity to stay with your old provider or choose a new alternative if they don’t want to join the new default you’ve selected.

You should make contributions to your default fund when:

• The employee started work before 1 November 2021 and has not chosen a super fund
• The employee started work on or after 1 November 2021, has not chosen a super fund, and doesn’t have a stapled fund
• Contributions to your employee’s chosen super fund or stapled fund have been returned to you and the employee can’t provide new/corrected super fund details before the deadline for your SG contribution

Staff may also choose to have their contributions paid to your default fund during the onboarding process, particularly if you’ve selected a fund with attractive features.