Super Guarantee and Freedom of Choice of Super Fund

Super Guarantee and Freedom of Choice of Super Fund

Understanding your rights when it comes to superannuation is important, especially regarding the Superannuation Guarantee (SG) and your ability to choose your own super fund.

What is the Superannuation Guarantee?

The Superannuation Guarantee is a legal requirement for employers to pay a percentage of your earnings into a superannuation fund to help you save for retirement. Currently, the SG rate is 11.5%, and it will increase to 12% from 1 July 2025. These contributions must be paid at least quarterly and are calculated based on your ordinary time earnings.

Freedom of Choice of Super Fund

Most employees in Australia have the right to choose their own super fund. This freedom allows you to select a fund that aligns with your preferences, whether it’s based on fees, investment options, or ethical considerations. When you start a new job, your employer should provide a "Superannuation Standard Choice Form," giving you the option to nominate your preferred fund.

If you do not choose a super fund, your employer will pay contributions into their default super fund. It’s worth reviewing this default fund to ensure it meets your needs, as it may have higher fees or limited features compared to other funds.



Key Benefits of Choosing Your Own Fund

• Control: You can pick a fund with investment options that suit your financial goals.
• Lower Fees: Compare funds to find one with competitive fees to maximise your retirement savings.
• Consolidation: By consolidating multiple super accounts into one fund, you can reduce duplicate fees and simplify account management.

Exceptions to Fund Choice

In some cases, your ability to choose a fund may be limited. For example:

• If you are part of a defined benefit scheme.
• If your super contributions are governed by a specific workplace agreement or enterprise agreement.

Take Charge of Your Super

Choosing your own super fund ensures that your retirement savings work harder for you. Review your options carefully and make informed decisions about where your Superannuation Guarantee contributions are going. If you’re unsure, speak to a financial adviser to understand your options and make the best choice for your future.