Superannuation Stapling

New ‘Superannuation Stapling’ Rules Introduced: What You Need To know

Key changes to super fund rulings and a mandate (from the ATO) to create a ‘stapled-fund’ came into effect on 1 November 2021. ‘Superannuation Stapling’ requires an existing superannuation account to be linked or ‘stapled’ to an employee, allowing for their information to be tracked as they change jobs. Failure to comply with these changes could result in employers facing hefty fines.

These measures seek to promote the use of one super fund account for the ease of individual and federal oversight, in addition to a reduction in account fees incurred every time an employee starts a new job.

Read more to find out what these changes entail.

Key Changes

Employers are now required to use the ‘Stapled Super Fund’ details (instead of the company’s default fund) of new employees who do not choose a super fund.

Note: These changes only apply to new recruits who have commenced work on or after 1 November 2021. Current employees are not affected by the new legislation.

Employers are expected to provide all new employees with a superannuation Standard Choice Form within 28 days of commencing their employment. If an employee does not nominate a fund within this time, then the employer will need to check whether a Stapled Fund currently exists through the ATO’s ‘Stapled Super Fund Request Service’. There is no limit to the number of requests that can be processed.

In situations where a Stapled Fund exists, an employer will be required to make contributions to the fund, enforceable under the existing obligations of the Super Guarantee. Employers who fail to confirm the existence of Stapled Super Funds could find themselves subject to shortfall penalties.

Request for Stapled Super Fund details from the ATO will not be required for:

  • Existing employees who have commenced work before 1 November 2021.
  • New employees who have commenced employment on or after 1 November 2021, but have nominated a superannuation fund

The ATO will notify employees about the request made for their Stapled Fund details and be advised of the details that are provided to the employer. The use of the ATO’s ‘Stapled Fund Request Service’ will be closely monitored to ensure employers are making genuine requests. Any organisation found using the service inappropriately (such as requesting information about existing employees) may have its access to the service revoked.

Steps To Requesting Fund Details

Before requesting Stapled Super Fund details from the ATO, businesses will need to have offered eligible employees the option to nominate their choice of super fund while also providing the ATO with confirmation that an employment relationship exists.

The steps are as follows:

  1. Offer eligible employees, including contractors, a choice of super fund where payments need to be made.
  2. Check access levels of authorised representatives to ATO services; disable access when no longer required in order to protect employees’ personal information.
  3. Confirm employment relationship after submitting a Tax File Number declaration or Single Touch Payroll (STP) pay event.
  4. Request Stapled Fund details (individual or bulk) via ATO online services.

For more information regarding Stapled Funds or recent changes, please visit the ATO website or get in contact with the team at Lockwood Partners.