Super Fund Stapling

As part of the Government’s Your Future, Your Super (YFYS) reforms, from 1 November 2021 changes that will affect the way employers onboard new employees in relation to their choice of super fund became law.

From 1 November employers will need to request ‘stapled’ super fund details from the Australian Taxation Office (ATO) for new employees who don’t choose a super fund. These changes are designed to reduce account fees by stopping new super accounts from being opened every time an employee starts a new job.

What does this mean for employers?

To search for an employee’s stapled super fund details:

  1. Log into ATO Online Services
  2. Enter an employee’s details, including their:
    • Tax File Number (TFN) – if the employee doesn’t provide their TFN, there is an exemption code employers can use but this may result in processing delays.
    • full name – including ‘other given name’ if known
    • date of birth
    • address (residential or postal), if no TFN was provided
  3. The result will be displayed in real-time on-screen. The ATO will also notify the employee of the stapled super fund request and the fund details that were provided.
  4. Once the active super fund details have been provided, the employer will need to pay the employee’s Super Guarantee (SG) into that fund.
  5. If the ATO does not find an active fund for an employee, the employer will need to pay their SG payments into their default fund.

As of now, employers should make sure they have the right permissions with the ATO to log in to online services and search for the super details of new employees.

You don’t need to offer a choice of super fund to some employees, but you may still need to request their stapled super fund details from the ATO. This includes employees that are either 1) temporary residents, or 2) covered by an enterprise agreement or workplace determination made before 1 Jan 2021.

What does this mean for employees?

The superannuation account an employee’s contributions are paid into will be ‘stapled’ to them. If they change jobs, their new employer will pay super contributions into their existing fund unless the employee completes a Choice of Fund form nominating their preferred superfund.

Whilst stapling means that fewer accounts are created, there is no guarantee that employees are getting the best outcome from their super by staying with their existing fund. Employees should regularly review their fund’s investment returns, fees and overall offering.

Need more information?

For more information go to the ATO website ‘Stapled super funds for employers‘ and download their Stapled Super Fund Reference Guide

Julian Roffe

Practice Manager

Ezra Legal

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