From 1 November 2021, if you have new employees who don’t choose a specific super fund, you may need to request their ‘stapled super fund’ details from the Australian Taxation Office. We’ll explore what a stapled super fund is and how it will impact you as an employer.
Existing superannuation requirements
Over the past year the rules governing superannuation funds have experienced a lot of changes and amendments that may have an impact on how you, as an employer, deal with super.
Currently, if a new employee doesn’t provide you with details of their choice of superannuation fund, then you may be paying contributions into a default superannuation fund of your choice. The employee may not elect a superfund of their choice as they don’t have one yet (if they’re new to the workforce), or for other reasons.
It’s also worth noting an employee will not be able to choose their superfund themselves if they hold a temporary working visa, or if their superfund undergoes a merger or acquisition.
As an employer, you’re required to provide a new employee with a superannuation standard choice form within 28 days of their start date. This form may also be provided if:
- The employee requests one
- You are not able to contribute to their chosen fun, of it’s no longer compliant
- You change the employer-nominated fund into which you pay the employee’s contributions
What are stapled super funds?
A stapled super fund is an existing account that is linked, or ‘stapled’ to an individual employee, so it follows them as they change jobs. If a new employee does not have a stapled fund and they do not choose a fund, the employee’s super can be paid into the employer’s default fund.
From 1 November 2021, if you have new employees who don’t choose a specific super fund, you may need to request their ‘stapled super fund’ details from the Australian Taxation Office.
This change aims to reduce the number of additional super accounts opened each time an employee starts a new job. As fewer superannuation funds are being opened, employees are less likely to generate ‘lost super’ as they transition through various jobs and careers leading up to their retirement.
Impacts of stapled super funds for a employers
As an employer, you’ll be able to request stapled super fund details for new employees using the ATO’s online services for business.
In preparation for the introduction of stapled super funds on 1 November 2021, you can view and update the access levels of your business’ authorised representatives (for example, your accountant) in the ATO’s online services. By preparing early you’ll be ready to request stapled super funds if needed.
Keep in mind that as an employer you cannot legally provide your employees with advice about which super to invest in (unless you’re licensed by ASIC to provide financial advice). However, you can provide your employees with some information about choosing a fund, including:
- Why they need to choose a super fund
- The process of choosing a fund
- Your obligations as an employer to pay the super guarantee and provide a default fund to pay into
- How they can nominate their chosen fund
It’s important to understand the changes that are coming in regards to stapled super funds. Employers will need to prepare themselves with the ATO’s online services for business by updating their authorised representatives in case they need to request stapled super funds.
If you’re not sure what these changes mean for you, don’t worry – our experts can help you with your tax and super queries. Get in touch with us today to better understand your options.