FAQs:
What is a stapled fund?
From 1 November 2021, a super fund will be ‘stapled’ to an employee, following them as they move from job to job, unless they choose another fund via a Choice of Fund form or their MyGov portal (linked to the ATO). This other fund will then become the employee’s stapled fund until such time they choose another fund.
When you hire a new employee, if they haven’t provided you with a Choice of Fund election, you’ll need to check with the ATO to see if they have a stapled fund. If so, you’ll need to pay SG into that.
The ATO determines an individual’s stapled fund. Where someone has multiple super funds, the ATO applies ‘tie breaker’ rules to determine which is the stapled fund.
The latest information is available from the ATO’s Request stapled super fund details for employees page.
Do I still need to provide a Choice of Fund form to new employees?
Yes. It is mandatory for employers to provide employees with a Standard Choice of Fund form. You need to record when you provide it, and when you collect a completed form from your employee.
As an employer with a nominated ‘default’ super fund, you can still provide details of your fund in Part B of the form.
More information is available at the ATO’s Offer employees a choice of super fund page.
If a new employee provides me with a Choice of Fund election, do I still need to check with the ATO if they have a stapled fund?
No. Receiving a Choice of Fund election (either via a form or the employee’s MyGov portal) means you will need to make payments to that super account. It doesn’t matter whether it is the employee’s stapled fund or not. You need to record receipt of the employee’s Choice of Fund election and keep it on record for 5 years.
More information is available at the ATO’s Offer employees a choice of super fund page.
Will the Standard Choice Form be amended to cater for ‘stapling’?
Yes. While the ATO has not confirmed this at the time of writing, we anticipate it will update its Standard Choice of Fund form to clarify where employers need to pay SG contributions if the employee doesn’t choose a fund.
The latest information will be available at the ATO’s Offer employees a choice of super fund page.
How do I find the details of the new employee’s stapled fund?
Employers:
From 1 November 2021, by logging onto ATO online services and entering the employee’s details. If you have large numbers of new employees, the ATO will facilitate bulk lodgements via the portal. More information will be released by the ATO in the lead up to 1 November on its Request stapled super fund details for employees page.
Employees:
Employees will be able to see details of their stapled super fund via their personal MyGov account (as long as it is linked to the ATO portal).
What about existing employees?
Existing employees aren’t affected by these changes. You must continue to make their superannuation guarantee (SG) payments into the same super account you do today.
Existing employees are still able to exercise Choice of Fund (via a standard form or via their personal MyGov portal linked to the ATO).
If a person is stapled to an employer’s ‘default’ fund, what happens if they leave the employer?
The person will be stapled to that fund (as determined by the ATO) and the super account will follow the person from job to job, unless they choose to move to another super fund.
Note that some benefits an employee receives in their super fund may cease when they leave the employer. This could mean an increase in product fees and insurance costs.
What will happen if an employer doesn’t pay SG contributions into a new employee’s stapled fund after 1 November?
If you don’t pay SG contributions on behalf of you employee into their stapled fund after 1 November, you may be in breach of the Choice of Fund laws. Penalties may apply, however the ATO has indicated some leniency in applying penalties if the employer is seen to be making reasonable attempts to comply with the new rules.
The latest information is available on the ATO’s Request stapled super fund details for employees and Super for employers pages.
Do I still need to have a ‘default’ super fund arrangement for my employees?
Yes. As an employer, under the current laws, you must have a ‘default’ super fund set up to pay SG contributions for those employees who haven't chosen a fund, and from 1 November 2021, who have no stapled fund.
The latest information is available from the ATO’s Select your default super fund page.
Providing a ‘default’ superannuation offer remains an important part of your employee benefits package to provide unique arrangements for employees such as:
- life insurance tailored to the unique needs of your workforce
- subsidised fees and costs
- tailored communications and seminars such as financial wellbeing and access to research.