Australia’s superannuation fund choice rules are changing: what do employers and employees need to know?

In Australia, employers must offer their eligible employees a choice of superannuation funds. From 1 November 2021, however, the rules regarding employees’ choice of super fund will change. Under the new rules, employers may have to request stapled super fund details from the Australian Taxation Office (ATO) when new employees start work with them but do not choose a super fund.

A stapled super fund is a superannuation account that follows an employee when they move between jobs - the new rules are intended to prevent employees from having multiple super funds which may become lost over time and from having to pay additional account fees when they make that transition. In order to ensure that super payments are administered correctly, employers should be familiar with the new rules and understand their obligations.

Stapled Super Fund Details

As an employer, after 1 November 2021, you may need to request stapled super fund details from the ATO when:

  • You take on a new employee
  • You are required to begin super guarantee payments for a new employee
  • The new employee is eligible to choose a super fund but does not do so

In order to request super fund details, you’ll need full access to the ATO’s online services for business. It is important to review and - where necessary - update online details to protect the privacy of your employees.

Remember: as an employer, you may incur penalties if you do not meet super fund or stapled super fund obligations by their quarterly due dates.

Stapled Super Fund Payment Process

The compliance process for implementing stapled super fund payments for new employees is as follows:

Step 1: Offer eligible employees a choice of super fund

All eligible employees should be offered a Super standard choice form. As an employer, you need to pay into the account that your employee has chosen (as indicated on their form). This is a standard process for choosing a super fund and most employees will be eligible to choose which fund their contribution goes into.

Step 2: Request details of the employee’s stapled super fund

If a new employee does not choose a super fund, you may need to request their stapled super fund details from the ATO, which can be found in the Employee Super Accounts section of online services. This process may be completed by your payroll provider or a similar tax professional. The ATO will provide an employee’s stapled super fund details after confirming that you are their employer - from that point, the employee’s super must be paid using those details.

Step 3: Pay the employee’s super

If your employee has chosen a super fund, you may pay their super into that fund. If you have received the relevant details, you may pay their super into their stapled super fund. You may pay an employee’s super into a default super fund (or another fund that meets choice of fund obligations) if:

  • The employee has not chosen a super fund, and
  • The ATO has advised you that the employee does not have a stapled super fund

If you are interested in doing business in Australia, find out everything you need to know about payroll, tax, social security, employee benefits, work permits, employment law and more in activpayroll’s Guide to Doing Business in Australia. This is available as a free PDF to download.

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