Choice of fund
Most working Australians can choose which superannuation fund (or funds) their retirement savings are invested with. This is called superannuation choice and you usually make your superannuation guarantee (SG) contributions to their chosen fund.
As an employer, you can choose AvSuper as the default super fund for your employees. You then pay their super contributions to us unless they make a choice or are covered by an award which specifies a default fund.
You may not have to accept an employee’s choice of fund – please refer to our rejecting choice fact sheet.
Choosing a default MySuper fund
As an employer, you have a legal obligation to select a default fund carefully. Since January 2014, your default fund must also be a MySuper licensed fund.
There are legislative requirements a fund must meet to be eligible as an employer default fund, including provision of a minimum level of insurance to members.
AvSuper is fully compliant, offers insurance cover (including minimum levels of insurance through our Automatic Cover) and was one of the first funds in Australia to be licenced for MySuper.
This means you can choose AvSuper right now as your default super fund.
Choice Liability Charge
The choice liability charge is an ATO penalty charged to employers who:
- don’t give employees a choice of fund form within 28 days of them starting work or requesting one, or when changing the default fund
- pay an employee’s contributions into the wrong fund
The charge is 25% of the affected contributions, up to $500 per employee per notice period, and this goes to the employee’s super account. Penalties may also apply unless you keep records for at least five years to show:
- employees who do not have to be offered choice of super fund
- when eligible employees were given a choice of fund form
- your choice of a compliant default fund
- confirmation the default fund chosen meets the legislated minimum death insurance requirements