Stapled Super Funds: What You Need To Know

With the introduction of the new rule about stapled super funds, the new Australian employees need to get stapled to their existing super accounts. With the effect of this new law, if an employee does not possess a super fund, it becomes the responsibility of the employer to pay their super contributions in their existing accounts.

What is super stapling?

A stapled super fund can be referred to as an existing super account stapled to an individual employee and follows them while they are switching their employment. It is introduced and designed by the Government of Australia to stop the practice of possessing multiple super accounts by an employee. Having more than one super account comes along with fees and insurance premiums, making it a costly affair for employees.

What If The New Employee Refuses To Specify?

There can be chances where a new employee refuses to specify where they want super while commencing a new job. In those conditions, as per the rules, it becomes the employer duty to seek their stapled fund as per the Australian Taxation Office (ATO).

How Will It Function?

Coming to effect from 1 November 2021, If a new individual joins an organisation, the employer needs to perform one additional step to determine whether you are bound to pay super contributions:

1. When a new employee offers the employer a decision of fund election, the employer will have to pay their super commitments as per their picked fund. It is up to the new employees whether they choose to join the employer super fund, in which opening a super account using SuperStream becomes imperative.
2. When a new employee does not offer a choice of fund election form, the employer needs to check with ATO about offering stapled funds for contributing.
3. There can be an instance where a new employee neither offers fund election nor has stapled fund. In this condition, the employer has to pay the employee’s super contributions to the default store or the fund named in the employee’s Industrial Award, Enterprise Bargaining Agreement (EBA) or Collective Bargaining Agreement (CBA).

How Can The Employer Request A Stapled Fund From The Ato Department?

The process of requesting for the stapled fund from the ATO department can be understood by:

1. Employers need to know if they have the optimum access to use the ATO online Services?

2. Log into ATO online services. Enter the employee’s information such as name, date of birth, address and tax file number.

3. Wait for the results to appear (Can take a few minutes).

4. The ATO department will intimate the employee regarding the stapled super fund request and the fund details given by them.