The  Australian Taxation Office has moved to calm fears that its new Single Touch Payroll system has the potential to damage superannuation fund members’ interests.

The ATO says concerns that new employees could be railroaded into joining high fee super funds favoured by employers when starting a new job without being given choices of other options or comparison information on performance are unjustified.

“The online service is optional,” the ATO said in a statement. That will mean when the STP system becomes mandatory for business with 20 or more employees from July 1 next year “employees can choose to use existing paper processes to provide their Tax File Number declaration and choice of super fund”.

Default fund arrangements will still apply to protect workers who don’t make a direct choice of fund, the ATO said. “Where no choice is made, entitlements are paid to the employer’s default fund.”

“New employees starting their first job can choose the employer’s default fund through the online form. Other super accounts are not displayed until the member has separately opened a new account with a fund.”

That will ensure that employees see the default option first and employees will have that to judge other offers against. Electronic signup registration under the new system will remain optional for both employers and employees, the ATO said.