Mercy Super - Always for you

From 1 July 2005 some working Australians are able to choose which fund their superannuation contributions are paid into.

 

The Choice of Fund legislation applies to 'Superannuation Guarantee' contributions made by employers on behalf of their employees.

 

If you are employed under a federal award you must be offered choice whether or not that award requires contributions to be made to a specific superannuation fund.  From 1 July 2006, employers that are corporations and were making superannuation contributions under a state award will have to offer choice to their employees.  These employees are now covered by the Federal workplace relations system under an agreement called a 'notional agreement preserving state awards'.

 

Some state laws also provide for choice of fund under state based arrangements.  For more information, you should refer to the specific information on each State and Territory.

 

If you are not sure what award or industrial agreement, if any, you are covered by, you can check with your employer or www.workplaceauthority.gov.au (for federal awards and agreements and links to information on state awards and state industrial agreements), or phone the workplace relations department in your state or territory.

 

Although changes may be made in the future, at the moment the following employees do not have access to choice of fund:

 

• People for whom contributions are being made in accordance with certain Workplace Agreements or certified agreements under the Industrial Relations Act or Workplace Relations Act.  This is likely to apply to many current and potential members of Mercy Super.

 

• Employees whose 'contributions' are made to unfunded public arrangements.

 

• Defined benefit fund members who would still get retrenchment and retirement benefits from that fund even if their employer paid future contributions to another fund.

 

Eligible employees are able to choose any complying superannuation fund (which includes Mercy Super), scheme or retirement savings account. Such funds are known as 'eligible choice funds'.  If you are eligible for Choice, and you do not choose a fund your employer must pay your Superannuation Guarantee contributions to a default fund of its choosing.

 

As Mercy Super is not a public offer superannuation fund, employers must apply to become an Associated Employer of the Fund.  Such applications will need to approved by the Fund Trustee and Principal Employer (the Corporation of the Trustee of the Order of the Sisters of Mercy in Queensland).

 

When did Choice of Fund start?

 

Choice commenced on 1 July 2005 with various changes made after this date.

 

 

Does Choice of Fund apply to me?

 

Depending on your employment conditions, many Mercy Super members will not be affected by the new legislation.

 

There are certain instances in which Choice of Funds does not apply, and these are:

 

• People for whom contributions are being made in accordance with certain Workplace Agreements or certified agreements under the Industrial Relations Act or Workplace Relations Act.  This is likely to apply to many current and potential members of Mercy Super.

 

• Employees whose 'contributions' are made to unfunded public arrangements.

 

• Defined benefit fund members who would still get retrenchment and retirement benefits from that fund even if their employer paid future contributions to another fund.

 

 

The following will only apply to you if you are eligible for Choice under Choice of Funds

 

What is your employer required to do?

  

Your employer is required to provide you with a form within 28 days of your request provided you are eligible for choice and you have not made a similar request in the previous 12 months.

 

To choose Mercy Super as your superannuation fund, you can download a

Choice of Super Fund Nomination form and Compliance letter here or request one by calling 1300 368 891 or 07 3163 8867.

 

 

What is a Standard Choice Form?

 

The Standard Choice Form is the form on which you may nominate your preferred super fund.  The form will also contain information on your employer's default fund, which is the fund your Superannuation Guarantee contributions will be paid into if you do not nominate a fund.  In many cases, the employer fund will be the fund that your employer currently pays super contributions into on your behalf.

 

The Standard Choice Form:

 

• advises that you may select your own 'eligible fund';

 

• highlights matters that you should consider before selecting a fund;

 

• provides the name of the fund into which your employer will pay your contributions if you do not make a choice;

 

• advises if choosing another fund will decrease the amount of employer contributions made on your behalf.

 

To choose Mercy Super as your superannuation fund, you can download a

Choice of Super Fund Nomination form here, and a Compliance Letter,  or request one by calling 1300 368 891 or 07 3163 8867.

 

Pay to your nominated fund

 

Once you have advised your employer of your chosen fund, your employer must begin making contributions to that fund within two months of receiving your written notification.

 

You can only make one choice in a twelve month period unless your employer agrees to accept more frequent choices.

 

Penalties can apply if your employer fails to make SG contributions to your chosen fund.

 

Your employer can refuse to accept your nomination if:

 

• you don't provide all the necessary information;

 

• you have chosen another fund within the previous 12 months. This 12 month period begins on the date that you first provide your employer all of the relevant information about your chosen fund;

 

• the nomination is outside the 28 day time frame;

 

• to contribute to your chosen fund your employer is required to become a "participating employer".

 

Please note: as Mercy Super is not a public offer superannuation fund, employers must apply to become an Associated Employer (sometimes called a participating employer) of the Fund.  Such applications will need to approved by the Fund Trustee and Principal Employer (the Corporation of the Trustee of the Order of the Sisters of Mercy in Queensland).

 

 

What are you required to do?

 

Decide whether or not you wish to choose a fund.

 

You are not required to make a choice.  If you do wish to exercise your choice you must provide your employer:

 

• the full name of the fund and the fund's ABN;

 

• your account number in the fund;

 

• the contact details of your chosen fund;

 

• a written statement from the Trustee of the fund stating that the Fund is a complying superannuation fund;

 

• written evidence that the fund will accept the contributions that your employer makes on your behalf;

 

• details of any number or other unique identifier the fund may use to refer to its superannuation products (e.g. Superannuation Product Identification Number - SPIN).

 

To choose Mercy Super as your superannuation fund, you can download a

Choice of Super Fund Nomination and Compliance Letter here, which contains all the above information,or request one by calling 1300 368 891 or 3163 8867.

 

You must notify your employer in writing of your preferred fund.  If you are completing the Standard Choice Form that has been provided to you by your employer, this form must be returned within 28 days of your receiving it.  A choice made after 28 days will not be effective unless your employer chooses to accept it.

 

Which funds can you choose?

 

You may choose a complying super fund or retirement savings account. Mercy Super is an eligible choice fund.

 

Do you have to make a choice?

 

You are not required to make a choice.

 

What happens when you have choice, but do not use it?

 

If you are eligible to choose your super fund, but do not exercise that choice, one of two things can happen:

 

1. If you are covered under a federal award that nominates a fund, then your employer must continue to pay contributions to that fund, in accordance with the award.
2. If you are not covered by a Federal award, your employer may choose any 'eligible choice fund' as the default fund and your Superannuation Guarantee contributions will be paid into it.

 

To be an 'eligible choice fund' the fund must be a complying fund and offer life insurance cover in respect of death that is at least equal to:

 

Age Range	Level of life insurance
20 - 34 years	$50,000
35 - 39 years	$35,000
40 - 44 years	$20,000
45 - 49 years	$14,000
50 - 55 years	$7,000

 

• Or the premium for a person under 56 years of age is at least 50 cents per week or the equivalent.

 

Defined benefit funds can meet the insurance requirement where they provide a death benefit with a future service component that is at least equivalent to the cover shown in the table above.

 

 

Where can you get further assistance?

 

The Government has initiated an education program to help employees and their employers understand their obligations under Choice of Fund.

 

For further information, visit the Tax Office's Choice of Fund website and search for 'Choosing a super fund' or call the Super Choice Infoline on 132 864.  You can also look at the Super Decisions booklet produced ASIC.

 

Please also feel free to contact Mercy Super.

 

 

Tips to help you make the right choice

 

Your superannuation is likely to be your major source of income in retirement.  If you are eligible for Choice of Fund it is important that you think carefully about the choice you make.

 

Before you decide to change funds, look closely at the fund you are currently in. Make sure you understand your fund; refer to Member Booklets (also called Product Disclosure Statements), your Member Statement and the fund's website.

 

Questions that you should consider asking include:

 

• Does your fund meet your needs?

 

• Are you happy with the level of service you have access to?

 

• Does it provide you with the insurance cover you need?

 

• Is it delivering returns you are happy with?

 

• Does it offer an investment option that suits you?

 

• Do the fees you pay represent value?

 

Is there a good reason to change funds?  Take a few moments to:

 

• Make sure you have enough information to properly compare your current fund with others that you are considering.

 

• Make sure you read all available information; Member Booklets (Product Disclosure Statements), websites etc.

 

• Make sure you understand any insurance cover offered; is it automatic; do you need to complete a health statement and/or have a medical check up; will you still be covered during times when you may not be working; how much are the premiums and how much cover is provided?

 

• Compare the fees charged by each fund, understand the different ways fees can be calculated and deducted to work out the final dollar impact on your savings. Do the fees represent value for the benefits and services you can access.

 

• Be aware of entry and exit fees as these are not always clearly explained.

 

• Be wary of sales people and financial planners offering you what seems to be a fantastic deal.  Check the small print relating to commissions and find out what's in it for them.