Choice of Superannuation Funds for New Australian Government Employees

Since 1 July 2006, Australian Government (AG) employers have been required to offer choice of superannuation fund (choice) to members of the Public Sector Superannuation Accumulation Plan (PSSAP) and new employees and new statutory office holders (eligible choice employees) in accordance with the Superannuation Guarantee (Administration) Act 1992 (SG Act).

Under choice, an employer is required to contribute to a complying superannuation fund or retirement savings account (RSA) that has been validly chosen by an eligible choice employee.

If the eligible choice employee does not validly choose a fund or RSA contributions are paid to an employer (default) fund. This fund must be a complying superannuation fund that meets the prescribed minimum level of life insurance requirements or an RSA. The PSSAP will be the employer fund for employees engaged under the Public Service Act 1999. Employers of other employees will have the flexibility to nominate the PSSAP or another appropriate complying superannuation fund or RSA as their employer fund.

Contractors and consultants who are employees for superannuation guarantee purposes only because they work under a contract that is wholly or principally for their labour and are not common law employees are not eligible to join the PSSAP. For these employees, an employer must comply with the choice requirements under the SG Act when nominating an employer fund.

Employers are taken to comply with choice in respect of contributions that are paid for employees:

  • into the Commonwealth Superannuation Scheme (CSS) or the Public Sector Superannuation Scheme (PSS); or
  • under the Superannuation (Productivity Benefit) Act 1988; or
  • under or in accordance with a workplace agreement.

Further information on choice arrangements is available at the Australian Taxation Office (ATO) website at [External Site] or by contacting the ATO on 131 020.

Archived Superannuation Circulars are available for historical information.

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Last updated: 21 October 2013