CHOICE OF SUPER. Choice of Super. It s my choice! It s my super. It s my future. A guide for Western Australian State Government employers

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1 CHOICE OF SUPER Choice of Super A guide for Western Australian State Government employers 1

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3 CHOICE OF SUPER Content About choice 4 What choice means for WA State Government 5 employees Employer nominated (or default ) fund 5 Where choice doesn t apply 6 How often can employees switch funds? 6 Your obligations as an employer 7 Step 1 Identify eligible employees 7 Step 2 Provide a Standard Choice Form 8 Step 3 Act on your employee s choice 9 The Base for Superannuation Contributions 11 The Base for Superannuation Contributions 11 Complying Superannuation funds 13 Complying annuation funds 13 Information and advice 14 Updated February

4 About choice The WA State Parliament amended the State Superannuation Act 2000 to provide for choice of annuation fund for WA State Government employees from 30 March Since than, most State Government employees have had the right to choose which fund their employer annuation contributions are paid to. Information to help you meet your choice of fund obligations, and for current and former employees, is available from the Department of Treasury s Public Sector Superannuation portal at 24

5 CHOICE OF SUPER What choice means for WA State Government employees Most State Government employees are able to choose the fund where their employer Superannuation Guarantee (SG) contributions are paid. New employees of the WA State Government are also offered their choice of fund, including public sector employees who have transferred to your agency. If you are currently paying SG contributions for your employees, they are able to choose a fund. Employer nominated fund An employer nominated fund (also known as a default fund ) is the fund to which you pay an employee s Superannuation Guarantee contributions if they do not choose a fund. GESB currently administers the default fund for most State Government employers, however some employers also have a complete or partial exemption and have nominated a default fund other than GESB. If an employee does not make a choice, their SG contributions should continue to be paid into the employer s default fund. 5

6 Where choice doesn t apply Defined benefit schemes such as Gold State Super, the Pension Scheme and the FES Super defined benefit account pay a specified benefit based on a particular level of contribution made by the member. For this reason, choice isn t available to employees whose contributions are made to these schemes. Contributing members of Gold State Super are able to withdraw from the scheme and direct their employer to make SG contributions to any complying fund. They cannot access or rollover their preserved benefit with Gold State Super until they reach preservation age (currently 55 years) and no longer work for the State Government. Employees wishing to withdraw from Gold State Super should be encouraged to seek independent financial advice relevant to their personal circumstances before making a decision. For more information, they may also contact GESB on or visit How often can employees switch funds? There is no restriction on the number of times WA State Government employees can change funds through their employer. 26

7 CHOICE OF SUPER Your obligations as an employer There are three steps you must follow to meet your choice of fund annuation obligations: Step 1. Identify eligible employees Use this flow chart to work out which of your employees are eligible for choice of annuation fund. Do you make annuation contributions for your employee to an accumulation or defined benefit scheme? Accumulation scheme ie. GESB s West State Super, GESB Super or another default fund Defined benefit scheme ie. GESB s Gold State Super and Pension Scheme or FES Super Employee is eligible for choice of fund. Provide a Standard Choice Form within 28 days of their start date. Contributions to defined benefit schemes are not eligible for choice of fund. You are not required to issue a Standard Choice Form to these employees. If you do have eligible employees see Step 2. Provide a Standard Choice Form. 7

8 Step 2. Provide a Standard choice form Provide the form to: New eligible employees, including existing public sector employees transferring from another agency, within 28 days of their start date. Your employee is not required to complete the form if they do not want to nominate a fund, but you have to give them the opportunity to nominate a fund if they are eligible. If your employee does not choose a fund, you must pay their annuation contributions into your nominated fund (or default fund). GESB administers the default fund for most State Government employers, however, if you have a complete or partial exemption from the State Superannuation Act, you may have a different default fund. How to obtain a Standard Choice Form Download a Standard Choice Form from the Department of Treasury s Public Sector Superannuation portal at or from the ATO website What to include on the Standard choice form You are only required to complete Section B: Employer to complete of the Standard Choice Form. GESB s details are provide on the Department of Treasury s Public Sector Superannuation portal to assist employers whose nominated fund is administered by GESB. 28

9 CHOICE OF SUPER If a fund has already been chosen If an eligible employee chooses a fund before you give them a Standard Choice Form, say, on their first day of work and they give you all the necessary information, you are required to act on their choice. Step 3. Act on your employee s choice When you receive the Standard Choice Form you need to check that the form has been completed correctly and the required information has been provided. From the date of receiving the completed Standard choice form from the employee, you have two months to pay Superannuation Guarantee (SG) contributions to the employee s chosen fund. It is also important to: Ensure the chosen fund is a complying fund Keep the necessary records Understand the penalties for failing to comply with your Choice obligations, and Understand your ongoing annuation responsibilities. Note: If you do not meet your choice of annuation fund obligations, you may be liable for the Superannuation Guarantee charge. For more information see Penalties for non compliance on page 10. 9

10 Keeping the necessary records You must keep records that: Show you have offered choice of annuation fund to your eligible employees and provided them with a Standard Choice Form. Show that you have acted on your employees choice of annuation fund. Contain information about your default fund, such as a copy of the Product Disclosure Statement (PDS). Your records must be in English and must be kept in accordance with the State Records Act If your records are not in a printed form (for example, on magnetic tape or computer disk), they must be in a form which is readily accessible and easily converted into written English. Penalties for non compliance If you don t meet your choice of fund obligations, you remain liable for the Superannuation Guarantee charge, together with interest and penalties. You must: Offer choice of annuation fund to your eligible employees. Act on your employees choice by paying their SG contributions to their chosen fund, or to your employer fund if they do not choose a fund. For more information visit

11 CHOICE OF SUPER The Base for Superannuation Contributions Public sector employers in Western Australia are required to pay Superannuation Guarantee (SG) contributions under the rules of both: the Superannuation Guarantee (Administration) Act 1992 (the SGAA), and the State Superannuation Regulations 2001 (the Regulations). The SGA requires employers to use ordinary time earnings (OTE) to calculate the minimum SG contribution requirements. The Regulations include a list of additional items for State workers, Section 4C items which are included when SG contributions are calculated. All public sector employers must pay contributions based on the SGAA, and the Regulations unless they have a complete exemption from the State Superannuation Act A list of the employers with a complete exemption can be found at regulation 12E. These requirements are employee entitlements and apply to contributions made to both public sector schemes administered by GESB and those made to other complying annuation funds. The additional items for State workers are listed in the Table under Regulation 12D. They are: 1. An amount of salary or wages which is not ordinary time earnings because it represents the excess of salary or wages over the maximum contribution base for the purposes of the SGA Act. 2. The amount of a weekly payment of compensation under the Workers Compensation and Injury Management Act An amount of salary or wages paid by way of annual leave loading. 4. An amount of salary or wages paid to a worker in lieu of overtime payments for hours that exceed ordinary hours of work for the worker s position, the working of which is a standard and permanent requirement for occupants of the worker s position. 11

12 5. The amount of an on-call allowance paid to a worker. 6. A payment, benefit or allowance to which a worker is entitled under a salary sacrifice agreement. 7. An amount of salary or wages paid to a worker a). (who is the holder of a visa or entry permit of a class set out in the Superannuation Guarantee (Administration) Regulations 1993 (Commonwealth) regulation 7(1); and b). who satisfies any conditions set out in that regulation in relation to the visa or entry permit held. 8. An amount of salary or wages paid to a worker for a period of maternity leave, early paid leave for an expectant mother if the Employer is unable to transfer her to a safe job, paternity leave, pre-adoption leave, adoption leave or other parental leave. 9. An amount of salary or wages paid a). to a worker who is engaging in jury service (including attendance for jury selection) that is required by or under a law of the Commonwealth, a State or a Territory; and b). by the worker s usual Employer while the worker is absent from his or her usual employment. 10. An amount of salary or wages paid a). to a worker who is engaging in a voluntary emergency management activity within the meaning given in the Fair Work Act 2009 (Commonwealth) section 109(1); and b). by the worker s usual Employer while the worker is absent from his or her usual employment. 122

13 CHOICE OF SUPER 11. An amount of salary or wages paid (a) to a worker who is undertaking service with the Australian Defence Force (for example, undertaking service in the Defence Force Reserves); and (b) by the worker s usual Employer while the worker is absent from his or her usual employment. 12. An amount of salary or wages paid to a worker who is employed to work not more than 30 hours per week and who is under 18 years of age. 13. An amount of salary or wages paid to a worker by an employer who pays the worker less than $450 by way of salary or wages in a calendar month. 14. An amount which the Treasurer declares, by notice published in the Gazette, is an item in respect of which a contribution is required under this regulation. Complying annuation funds A annuation fund is considered to be complying if it meets specific requirements and obligations outlined in the Superannuation Industry (Supervision) Act It is your responsibility to check whether the fund an employee has nominated under choice is a complying fund, before remitting any contributions. One way to check this is by visiting the Super Fund Lookup at 13

14 Information and advice What you can tell your employees You can provide factual information about: Your obligations under choice of fund. The employer default fund. How the employee can nominate a chosen fund. What you can t tell your employees You should not make recommendations about: Which annuation fund they should choose or remain with. The level of personal contributions they pay to annuation. Whether their annuation should be consolidated. These recommendations may amount to either general or personal financial product advice. Anyone providing financial product advice is generally required by law to be licensed by the Australian Securities and Investments Commission (ASIC). 14 2

15 CHOICE OF SUPER Employees can find out more about how to compare and choose annuation funds from the following independent sources: The Department of Treasury s Public Sector Superannuation portal at The Choice of Super booklet for employees available from The Australian Securities and Investments Commission s free booklet Super Decisions available from The Australian Securities and Investments Commission consumer website, Moneysmart, which has lots of general information about annuation, including a annuation calculator at The Australian Tax Office has information about choice of fund, lost annuation accounts, co-contributions, tax rules and self managed annuation funds at The National Information Centre on Retirement Investments website for free, independent information about annuation and tax at The Financial Information Service run by the Department of Human Services on

16 Information including advice ( information ) provided in this brochure is given in good faith and solely on the basis that you are responsible for making your own assessment of it and that you obtain your own independent advice. The information should not be construed to waive any legal obligations on your part. The State of Western Australia and its servants expressly disclaim any liability and responsibility for the information contained in this brochure. Persons relying on this information waive and release the State of Western Australia and its servants to the full extent permitted by law from any and all claims relating to the use of the information. The State of Western Australia and its servants do not accept liability for any injury, loss or damage incurred by reliance on the information. This publication may not be reproduced or copied, except with the express permission of the Department of Treasury.