Preparing your business for upcoming changes to super
We can help you understand the impact Stapling will have on how you manage your super obligations from 1 November 2021.
There are some significant changes coming to super that will affect employers. We can help you understand the impact they’ll have on how you manage your super obligations.
Stapling is an Australian Government reform that starts on 1 November 2021.
What is super stapling?
The introduction of super stapling means working Australians will be ‘stapled’ (attached) to one super fund for life unless they choose otherwise. This system aims to reduce the number of super accounts people may gain throughout their working life.
Employers will need to pay a new employee’s Superannuation Guarantee (SG) contributions into their stapled super account rather than creating a new one for them – and you’ll need to check with the Australian Taxation Office (ATO) if your employee has a stapled super fund.
Why is stapling being introduced?
Stapling is aimed at stopping the creation of multiple unintended super accounts and the erosion of super balances. Making informed choices about super reduces the potential to be stapled to a super fund that may not lead to the best retirement outcome.
If an employee changed jobs multiple times over their working life, and never nominated a super fund, they may have multiple super accounts with different super funds, all charging separate fees and insurance premiums.
The Government says stapling should result in 2.1 million fewer unintended super accounts over the next 10 years and will boost balances in super by about $2.8 billion by avoiding duplicate fees and lost returns. ^
What stapling means for employers
Under stapling requirements, when a new employee starts a job, the employer must pay eligible super contributions into their existing super fund if they have one or another super fund they select.
If the employee doesn’t nominate a super account when they start a new job, the employer will pay their super contributions into their existing stapled super fund. Employers can get the information about an employee’s existing super fund from the ATO.
The employer will do this by logging onto the ATO’s online services and entering the employee’s details. Once an account has been selected, the employer will then pay super contributions into the employee’s identified super account.
Only if the employee doesn’t have a stapled super account and doesn’t decide on a super fund when they start can the employer pay their super into the employer’s nominated default super fund.
The ATO will release more information closer to 1 November to help employers understand these changes and meet their obligations.
As an employer, you’ll play a key role in super stapling with changes in how you onboard new employees and pay super, unless a state or industrial award prescribes where super must be paid.
Refer to the checklist below for an overview of what to consider at each stage.
A checklist for onboarding new starters
- Your new employees can join online, or you can ask them to complete the ATO’s standard choice form to nominate their chosen super fund. If your employee makes a super choice, have them submit it to your HR/payroll team.
- If your new starter doesn’t choose a super fund when they start employment, you’ll need to check whether they have a stapled super fund with the ATO.
- If they have a stapled super fund, pay their super into it. If they don’t, pay their super into your business’s default super fund or the super fund named in the relevant Enterprise Agreement or Award.