Friday, October 3, 2008

Choosing a default fund

As an employer you must choose an employer-nominated fund for employees who do not exercise their right to choose a super fund.

Through the introduction of Choice of Fund Legislation most employees are now eligible to choose their own super fund. However, most employees contribute to their employer-nominated fund rather than selecting another fund. This is mostly because most employees are not focussed on building their retirement nest egg.

Employers, though, need to select a fund wisely so that their employees who contribute to that fund are well served. In choosing a default fund, employers must consider whether the fund meets prudential regulatory requirements, has effective procedures in place for following up arrears in payments, has a representative trustee structure, and complies with relevant legislation.

Regardless of what fund you choose for the default fund you can serve your employees well by making all payments to that fund through Superconnect. At Superconect we have electronic connection with hundreds of funds and can electronically make the payments and send advice slips to the relevant fund through the Superconnect Clearing House.

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