Key Highlights

  • Eligible employees and some contractors can generally nominate the super fund receiving their compulsory Superannuation contributions.
  • Super funds include industry, retail, public sector, corporate and self-managed super funds, with eligibility varying between fund types.
  • Employees who do not nominate a fund may have compulsory contributions directed to an existing stapled super fund or an employer’s default fund, depending on their circumstances.
  • Members can use ATO online services and the YourSuper comparison tool to monitor accounts, consolidate super and compare eligible MySuper products.

Australians can generally choose where their superannuation contributions are paid, although eligibility depends on employment arrangements and the type of agreement covering the worker. Employees, certain contractors and self-employed people have different Options when establishing or managing their retirement savings.

When comparing funds, members can consider administration fees, insurance arrangements, Investment choices, member benefits and historical performance. Investment options can involve different levels of risk, with some choices seeking higher returns while accepting greater fluctuations and others placing greater emphasis on security.

Telling an Employer Which Fund to Use

Where a worker is eligible to choose a super fund, the employer must provide a Superannuation standard choice form or direct the employee to obtain the form online. The completed form can then be provided to the employer.

If a worker does not choose a fund, or is not eligible to make a choice, the employer may need to direct compulsory super contributions to an existing stapled super fund. Where there is no existing super account and the employee has not selected a fund, the employer can generally use an eligible default fund offering a MySuper product.

Employers that Fail to pay compulsory super contributions on time or into the appropriate fund can become liable for the super guarantee charge. Amounts relating to identified shortfalls and applicable interest can subsequently be paid into the employee’s super account.

Who Can Choose a Super Fund?

Eligibility is influenced by employment arrangements. Workers employed under certain awards or registered agreements, as well as people not covered by an award or registered agreement, may generally have the right to choose a fund. Some contractors paid wholly or principally for their labour can also be eligible for superannuation purposes.

There are circumstances where employees cannot choose the fund for their compulsory contributions. These can include workers covered by certain state awards or agreements, some workplace arrangements made before 1 January 2021, public sector employees and members of particular defined benefit arrangements or funds where specified benefit thresholds have been reached.

Self-employed individuals operating as sole traders or partners are not required to make super contributions for themselves. They can nevertheless make personal contributions to a super fund and, where eligibility requirements are satisfied, may access certain tax-related concessions or government contribution arrangements.

Types of Super Funds

Australia has several broad categories of super funds. Industry funds can have membership restrictions linked to particular industries or awards, although some are open more widely. Retail funds are generally operated by financial institutions and are commonly available to the broader public.

Public sector funds generally serve government employees, while corporate funds are typically associated with particular employers or corporations. Some of these arrangements can include defined benefits.

Self-managed super funds, or SMSFs, operate differently because members manage the fund themselves as trustees. This brings legal responsibility for investment decisions and compliance with superannuation and taxation requirements.

Approved deposit funds are primarily used as rollover vehicles and have different rules from conventional super funds, including restrictions on receiving contributions and paying pensions.

Understanding Stapled Super Funds

A stapled super fund is an existing super account linked to an individual and intended to follow them when they change employment. If a person has one eligible existing account, the ATO can identify that account for the employer.

Where multiple eligible accounts exist, the ATO applies tiebreaker criteria. These can include whether an account has previously been identified as stapled, the timing of recent contributions, account balances and when the accounts were established.

Members who have concerns about which account may be selected can nominate a preferred fund through the standard choice process.

Beneficiaries and Online Super Management

Members should also review beneficiary nominations because superannuation death benefits are not automatically governed by a person’s will. A valid nomination can help direct benefits according to the applicable fund and legal requirements.

Conclusion

Choosing a super fund involves understanding eligibility, comparing fund features and keeping track of existing accounts. The rules differ according to employment circumstances, fund structures and individual arrangements. Stapled funds can provide continuity when workers change jobs, while ATO online services offer tools for monitoring and consolidating super. Beneficiary nominations are another important part of managing a super account because death benefits are handled under superannuation rules rather than simply through a will.