To navigate the upcoming changes to superannuation, super stapling, as part of the government’s Your Future, Your Super package of reforms. It’s important you understand how these new rules work as they will change how you pay your employees’ super.
What is Your Future, Your Super and Super Stapling?
As part of the federal Budget in October 2020, the government announced the Your Future, Your Super (YFYS) package. These super reforms are designed to deliver better outcomes for members. They are significant and will have profound impact for employers.
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 super 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.
- You still need to provide employees with a superannuation choice form. 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 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.
- 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.
It is important to note that employees can still choose to change funds if they wish.
To conclude, stapling changes the default fund from one nominated by an employer to the fund an employee already has.
Employment contract templates may need to have the superannuation clause updated by your HR professional.
If you are an employee looking to compare funds, you can use the ATO’s online – Your Super comparison tool