Stapled Superannuation Funds: Reducing Unnecessary Creation of New Super Accounts
From 1 November 2021, employers may need to request stapled super fund details from the ATO for new employees who do not choose a super fund to receive contributions. A Stapled Superannuation Fund is an existing super account which is linked, or ‘stapled’, to an individual employee so that it follows them as they change jobs. This amendment to superannuation legislation is designed to stop the unnecessary creation of new super accounts and reduce account fees. This new legislation will change the way employers manage super for new employees.
From 1 November, if you have new employees start, you may need to complete an extra step to comply with the choice of fund rules. If a new employee does not choose a super fund, you will need to request their ‘stapled super fund’ details from the ATO. You will be able to request stapled super fund details for new employees using Online Services for business. As an employer, you will be obligated to search for new employees’ existing fund. A new account can only be created with the employer’s default fund once it is confirmed by the ATO that it cannot identify a stapled fund for the employee.
To conclude, stapling changes the default fund from one nominated by an employer to the fund an employee already has.
It is important to note that employees can still choose to change funds if they wish.
If you are an employee looking to compare funds, you can use the ATO’s online YourSuper Comparison Tool.
Frequently Asked Questions
1. Are existing employees affected?
No, the stapled fund rules only apply to new employees who commence work on or after 1 November 2021.
2. If an employee uses the ATO Standard Choice Form to choose a fund, is an employer required to request stapled fund details from the ATO?
No. If an employee exercises their choice of fund, an employer has no obligation to request details of their stapled fund from the ATO. The rules apply in the absence of a choice of fund.
3. What about contractors?
Yes, these rules will apply equally to a person who works under a contract that is wholly or principally for their labour – in this case, the person is considered and treated like an employee for Superannuation purposes.
4. Do I need to make changes to my employment contracts?
Yes, for new employees commencing on or after 1 November 2021. Current superannuation clauses will need to be updated to refer to the possibility of contributions being made into an employee’s stapled fund. You should discuss this further with your Employment Law expert.