Super Stapling and what it means for you
From 1 November 2021, new legislation comes into effect regarding Super Stapling, part of the ‘Your Future, Your Super’ reforms outlined in Budget Changes 2020-21.
This legislative change came off the back of the Banking Royal Commission where it was identified that many employees held numerous superannuation accounts, all incurring fees. The objective of this reform is to promote employees having ‘one super fund for life’ unless they choose otherwise.
For more information on Super Stapling, please visit the ATO Website.
What does this mean for me from 1 November?
Employers will no longer be able to apply the employer’s default super fund if an employee does not nominate a super fund when they commence with your business.
If an employee does not nominate a super fund or choose the company’s default fund, employers must identify if the employee has an existing fund in their name and pay all super contributions to that existing fund.
To manage this, employers will need to obtain information about the employee’s existing superannuation fund via the ATO’s Online Services Portal.
To make sure you’re ready to request stapled super fund details, check and update the access levels of your authorised representatives in ATO Online Services. Your representatives will need to have permission to access the ‘Employee Commencement Form’ to request a stapled super fund.
Checking with the ATO for existing super funds
Once logged in, employers can enter the employee’s details to identify if the employee has an existing super fund. If the new employee:
- does have an existing super fund, the employer must ensure they pay all superannuation contributions into this fund.
- does not have an existing super fund and does not make a decision regarding a fund, the employer must then pay the employee’s superannuation into their nominated businesses default superannuation fund (as per the current process).
For more information about adding a superannuation fund to an employee, please see our Help Centre guide.
Compliance with Super Stapling obligations
It is important to note that failing to adhere to these new regulations will incur penalties. The penalties will be reduced during the 12 month introductory period 1 November 2021 - 31 October 2022, provided the employer makes best efforts to comply.
As this change places additional administrative burden on employers, it is important to ensure that employees are nominating a super fund at the time of hire. This will alleviate the need for the employer to go through the process of checking if the new employee has an existing fund, and reduces the risk of financial penalties.
Can I access this information directly from Astute?
The ATO does not yet have an API for Software Developers to obtain this information. They are currently working on specs to build out this functionality and hope it will be finalised by mid-2022.
We’ve been working with the ATO to represent our industry with this rollout and will be keeping a close eye on their progress over the coming months.