What you need to know about the upcoming changes to super

Super stapling is set to commence this November. This means employees will be ‘stapled’ to their existing superannuation accounts unless they choose to change funds.

The aim of super stapling is to prevent the creation of unnecessary superannuation funds and address the hefty fees incurred to millions of Australians each year.

How will super stapling affect employers?

Super stapling will affect the onboarding process for any new employees who commence work in your business from 1 November 2021. 

If a new employee does not nominate a superfund account, you will be obligated to search for your new employee’s existing superannuation fund.  

These rulings do not apply to existing employees in your business. 

How to check if a new employee has an existing super fund account

You can check whether any new employee already has a superfund ‘stapled’ to them by visiting ATO Online Services.

After logging in, you’ll need to search for your employee by their name, TFN, date of birth and residential address. If the search results identify a superannuation fund is linked to your new employee, you will be obligated to use this fund for their super guarantee and any salary sacrifice payments. 

What about my default super fund?

If a new employee doesn’t elect a super fund, and the ATO indicates there isn’t a superannuation fund ‘stapled’ to your employee, you will still be able to make contributions to your default super fund. (This is so long as the employee does not fall under an EBA or award with a mandatory fund).

You may need to check with your default super fund to see whether your participation agreement will be changing. Some funds require fee discounts or tailored pricing conditional upon a certain percentage of employees being in your default fund. Super stapling may affect your percentages going forward. 

Do business owners need to update their employment contracts?

You will need to update your contacts for any new employee starting after 1 November 2021. Your current superannuation clauses will need to be amended to note that Superannuation Guarantee (SG) payments will be paid into your employees stapled account.

Why is Super Stapling starting?

Super stapling is part of the government’s ‘Your Future, Your Super’ (YFYS) reforms which were brought into play in the 2020 budget last October.

The purpose of super stapling is to address the problem of unintended multiple super accounts which diminish the retirement savings of working Australians. The ATO have estimated there are approximately 6 million unintended multiple accounts in the superannuation system, charging $450 million per year in fees. 

Questions about Super Stapling?

If you have questions about the new super stapling legislation, contact your Client Manager on (08) 9071 2173 or email us at admin@smithshearer.com.au. Alternatively, fill in the form below and we'll be in contact.