On 1 November 2021, new rules commence regarding stapled superannuation funds for new employees who are eligible to choose a fund. In particular, if a new employee does not nominate their own superannuation fund, their employer must check whether the employee has an existing stapled fund with the ATO. If a stapled fund exists, the employer will be required to make contributions into that fund to comply with superannuation guarantee obligations.
What is a stapled superannuation fund?
A stapled superannuation fund is an existing fund that is linked to that employee. Employees will keep this fund when they change jobs unless they decide to nominate a new account. The ATO will determine which superannuation account is the employee’s stapled fund, applying certain ‘tiebreaker’ rules set out in the legislation. The stapled fund will generally be the fund that the employee last received contributions into, but this will not always be the case.
How does super stapling work?
If a new employee nominates their own valid superannuation fund using the Standard Choice Form, an employer must make contributions into this fund. Alternatively, if no fund is nominated by the employee, the employer must log into the ATO online services and make a request for an employee’s stapled fund details. An employer will only be able to request these details after they have submitted a Tax file number declaration or Single Touch Payroll pay event linking the employer to employee. If a stapled fund exists, an employer must make contributions into this fund.
The stapled fund rules only apply to new employees who commence work on or after 1 November 2021. They do not affect existing employees.
What should employers do?
Employers should review their onboarding and payroll systems to ensure that they are in a position to comply with the new superannuation stapling requirements from 1 November 2021. Further, employers should review their standard employment agreements to ensure they reflect the fact that superannuation contributions will need to be made into a new employee’s stapled fund if the employee does not nominate a fund.
For further information regarding the above, please contact Martin Alden, Partner at email@example.com, Jessica Cirnigliaro, Associate at firstname.lastname@example.org, or any member of our Employment, Workplace Relations & Safety team(s).
This information and the contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders, and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.