From 1 July 2005, most employers will be required to allow their employees to choose the superannuation fund their future compulsory 9 per cent superannuation guarantee (SG) contributions are paid to.

The opportunity to choose must be offered to all eligible employees. Eligible employees are all employees, except:

• employees where contributions are made under a state award or industrial agreement
• employees where contributions are made under an Australian Workplace Agreement or Federal certified agreement
• most public servants
• members of some defined benefit funds

Employers will be required to provide all eligible employees with a standard choice form. The form must be provided to existing employees before 29 July 2005 and to any new employees with 28 days of their employment commencing.

Employees are under no obligation to choose a new superannuation fund from 1 July 2005. They may choose to remain with their current fund and choose another fund at a later date. If an employee chooses a new fund, their employer has two months to act on the choice and contribute to the chosen fund.

Where an employee does not choose a fund, the employer will be required to pay the SG contributions to their ‘default’ fund. The default fund is the superannuation fund the employer has nominated to receive SG contributions for employees who have not chosen their own fund. The default fund must be a complying superannuation fund and meet minimum insurance requirements.