Super fund choice

Employers affected by the choice of fund provisions will be required to give a standard choice form to their existing employees before 29 July 2005, and within 28 days of commencing employment for new employees.

Employers will have two months to action employees' choices and start paying contributions into the choice fund, according to minutes of the ATO Business System Working Group meeting held in Sydney on 1 December 2004

Employees can choose a new complying fund; stay in the existing employer fund; or not make a choice, resulting in contributions going to the default fund identified in the standard choice form.

Failure to meet these obligations may attract the Super Guarantee charge. Employees can change funds once every 12 months (more often if employer allows it) and do not have to use the Standard Choice Form.

The ATO says employers will need to keep records for five years to show the choice requirements have been met and any additional documentation provided. However, the ATO notes there is no need to send standard choice forms to the ATO or the fund.

The Regulations for Choice of Fund are not expected to be finalised until March 2005. The regulations will cover the content of the standard choice form, information an employee choosing a fund must give their employer, the minimum level of life insurance to be offered by the default fund, exemptions where a trustee may provide benefits to employers.