Are you aware of the changes to “choice of fund” rules? Have you heard the term “Stapled Super Fund” being thrown around online?
This year has seen a lot of amendments and changes to the rules governing superannuation funds and their providers. These changes may have an impact on how you as an employer deal with super.
Currently, as an employer, you may be paying contributions to your new employees into a default superannuation fund of your choice if they have failed to provide you with their own choice of superannuation fund details. This may be due to not having a superannuation fund or due to other circumstances.
As an employer, you must provide all new employees with a Superannuation standard choice form within 28 days of their start date. They may also be provided with one if:
- They, as an employee, request one
- You are not able to contribute to their chosen fund, or it is no longer a complying fund.
- You change the employer-nominated fund into which you pay the employee’s contributions.
For example, if the employee holds a temporary working visa or their super fund undergoes a merger or acquisition. In these cases they will not be able to choose their super fund themselves.
Stapled Super Fund – The New Rules
From 1 November 2021, if new employees start and don’t choose a specific super fund, you may need to request their ‘stapled super fund’ details from the Australian Taxation Office.
A stapled super fund is an existing account that is linked or ‘stapled’ to an individual employee, so it follows them as they change jobs. This change aims to reduce the number of additional super accounts opened for each new job. If a new employee does not have a stapled fund and does not choose a fund, the employee’s super can be paid into the employer’s default fund.
With fewer superannuation funds opened, employees are less likely to generate ‘lost super’ as they transition through their employment periods.
As an employer, you’ll be able to request stapled super fund details for new employees using the ATO’s Online services for business.
How To Get Ready
To get ready for this change, you can check and update your business’s authorised representatives’ access levels (such as your accountant or bookkeeper) in Online services. This will mean you’re ready to request stapled super funds if needed. It will also assist in protecting your employees’ personal information.
As an employer, you legally cannot provide your employees with recommendations or advice about super unless ASIC licenses you to provide financial advice. You can give your employees information about choosing a fund, however, including:
- Why do they need to choose a super fund?
- The process of selecting a super fund.
- Your obligations as an employer are to pay the super guarantee and provide a default fund to pay into
- How they can nominate their chosen fund
Remember, registered tax agents and BAS agents like us can help you with your tax and super queries. Speak with us about your options and ensure that you are compliant with your super requirements as an employer.
