The Federal Government's Superannuation legislation (Choice of Superannuation Funds) Act 2004 commenced on July 2005. This law primarily affected those employees who worked for businesses operating under a Federal Award. It required their employer to offer them a choice of superannuation fund.

The 2005 law exempted employers from having to offer choice of superannuation if the business was already complying with an obligation to make superannuation contributions under : -

• a State award;
• a Certified Agreement; or
• an Australian Workplace Agreement.

More recently, the Federal Government has announced changes to Workplace Relations Regulations making it a requirement for incorporated businesses operating under State Awards to also offer choice to employees from 1 July 2006.

This new law only applies to corporations and will not affect businesses which are not incorporated and which have been complying with an obligation to make superannuation contributions under a State Award or Agreement.

For those incorporated businesses affected by the new law, the requirement is to provide NEW employees with a Standard Choice Form on commencement. A form is to be given to an existing employee on request.

If you are unsure about whether you have an entitlement to exercise choice of superannuation, contact the Super Choice Infoline on 13 28 64 for advice.

Employer is Incorporated?

From 1 July 2006, if a business is incorporated and operates under a State Award, that employer will be required to offer Choice to its employees.

What will need to happen?

If an employer is affected by Choice, the following will need to happen ; -

• from 1 July 2006 all new employees to be given a Standard Choice form on commencement.
• an existing employee is to be given a Standard Choice form on request.

An employer must provide an employee with a Standard Choice form within 28 days of a written request, unless one has been provided within the last twelve months.

STANDARD CHOICE FORM

The Government has released a Standard Choice Form.

Part A contains the information an employer must provide employees (ie: the name of the Employer fund) which will be used for the super contributions of those who choose not to exercise choice.

Part B lists the information an employee should give to a business ; -

• Details of chosen fund and account information
• Evidence that it is a complying fund and will accept employer contributions; and
• Details of how an employer can make contributions.

Note that an employer is still able to process a choice advice even if it does not include all of the information listed in Part B. However, the prerogative as to whether or not to process your Choice form is with the employer where you have not provided all of the required information.

Tasplan As Your Chosen Fund

If you want Tasplan to be your super fund, Simply click on the adjacent button and print a pre - completed form that you only have to sign and give to your employer - it's that easy!

This Choice form includes all of the information required by law.

(Note: if your employer is not currently a Tasplan participating business, it will need to complete and return a simple enrolment document before contributions on your behalf can commence.)

How long has an employer got to process a Choice form?

Following the commencement of the new law, a business will have to process a Choice form and commence super contributions into a nominated fund within two months.

What if an employee doesn't make a choice?

Where an employee has not nominated a fund or the employer does not accept the employee's choice advice because it does not contain all of the necessary information about the selected fund, or the employer is unable for some reason to contribute to that fund (ie: it may not be a complying fund), the employer may pay the super contribution into an Employer Fund in order to satisfy the employer's Superannuation Guarantee obligation successfully.

What is an Employer Fund?

Generally, the employer or default fund can be any complying superannuation fund chosen by the employer, provided it offers life insurance of a kind specified in the regulations. This fund will generally be one that is nominated in the applicable award - unless for some reason an employer nominates another default fund - which they may be entitled to do. So, if you don't like the fund selected by the employer, make sure you exercise your right to choose your own preferred fund.

How often can employees make a choice?

Once an employee has made a choice, a further choice cannot be made for 12 months (unless the employer agrees to do so).

How does an employee make a choice?

An employee must provide to an employer information about the Fund they have chosen (refer Standard Choice Form above); the employer has two months to commence making contributions to the nominated fund. Remember, if you want Tasplan, click on the box above and simply sign and hand the advice to your employer.

How can I go about making the right choice?

Employees need to think carefully before they change funds as some financial advisers may have a 'vested interest' in recommending particular funds or investment products. Employees should ; -

• Look carefully at the fund they are currently in, make sure they understand it, whether it meets their needs and is delivering returns that they are satisfied with. Is there a good reason to change funds?
• Make sure they are being given enough information to properly compare any offer from another super fund with their current fund. (Funds like Tasplan offer a free comparison service provided by a firm of financial planners).
• Check the price tag (the fees and charges) of the fund they are being offered, and compare it with the fund they are in now. Understand the costs, and the differences in features between what they have, and what they are being offered.
• Make sure they understand any insurance cover being offered – including the possibility of losing an insurance benefit as a result of choice.
• Be very wary of salespeople and financial planners who offer what seems like a fantastic deal. Check what's in it for them. Ask questions!
• Be aware of entry and exit fees – even under the new fee disclosure regulations, these are not necessarily clearly displayed, and can be quite expensive.

How can I make a comparison between Tasplan and another fund?

You may wish to use this handy Super Fund Checklist PDF to help you compare Tasplan Super with other super funds. We've already provided the Tasplan information to get you started. Alternatively, you can contact Tasplan on 1800 005 166 to arrange a free fund comparison.

Ask your employer to call 1800 005 166 for a Tasplan Client Service Manager to visit your workplace and provide a presentation, or answer questions about Choice.

Further information about choice of fund can be obtained from the Australian Taxation Office website www.ato.gov.au then follow the path of: For Individuals -> Super essentials -> Advanced topics -> Choosing a super fund or visit The Australian Securities and Investments Commission FIDO website www.fido.gov.au/super

This information is of a general nature only. It has been prepared without taking into account your particular financial needs, circumstances and objectives. You should assess you own financial situation and read the Product Disclosure Statement (PDS) PDF relating to the products before making a decision based on this information. You may wish to seek the help of an adviser to do so. Please call 1800 005 166 to obtain a copy of the Tasplan PDS.