Everything you need to know about super stapling and how to prepare
From 1 November 2021, employers will need to alter their onboarding and payroll processes to comply with the new super stapling requirements.
The current superannuation system has left many employees with more than one superannuation account, increasing account fees and impacting retirement balances. Treasury has estimated that reducing the number of duplicate superannuation accounts will save Australians about $2.8 billion over the next 10 years.
What is super stapling?
As part of the Your Future, Your Super reforms, any existing super funds will be linked, or “stapled”, to an individual’s myGov record, ensuring their superannuation remains with them as they change jobs.
As of 1 November, employers are required to make super guarantee (SG) contributions to an employee’s existing stapled super fund, unless the employee has specifically asked that their super be paid into a different account of their choice.
What do employers need to do?
If a new employee does not nominate a super fund during the onboarding process, employers must check, using the ATO online services, to see if the employee has an existing stapled super fund. If the employee has a stapled fund, employers must use this fund for SG contribution payments.
When an employee chooses to have their super paid into a different fund, the employer must pay SG contributions to that nominated account. If the employee does not choose nor have an existing stapled fund, contributions should then be paid to the employer’s default MySuper fund.
How do employers request an employee’s staple fund from the ATO?
Employers can request an employee’s staple fund they have submitted an employee’s tax file number declaration form or Single Touch Payroll pay event linking a new employee to the business.
Any authorised representative may use ATO online services to request an employee’s staple fund information.
To do so, the authorised representative will need to:
- Log in to ATO online services
- Enter the employee’s details
- Receive a response regarding any super funds stapled to the employee.
To make requests for more than 100 new employees at once, employers will need to fill out a bulk request form, send it to the ATO and wait up to five days for the results.
When do employers need to start super stapling?
The super stapling requirements come into effect from 1 November 2021.
Does super stapling apply to existing employees?
Super stapling won’t change the arrangements of existing employees and businesses must continue to pay SG contributions into their current fund.
How should businesses prepare for super stapling?
Prior to 1 November 2021, employers should:
- Ensure authorised representatives have full access in ATO online services to request stapled super fund details
- Update superannuation clauses in employment contracts to make new employees aware of the possibility of contributions being made into their stapled fund
- Make sure their team are fully aware of the changes and implications
- Discuss questions and concerns with your payroll provider.
Are there penalties for super stapling non-compliance?
If employers fail to meet super stapling obligations, they are at risk of penalties and fines from the ATO. However, the ATO has advised that should penalties be incurred within the first 12 months (1 November 2021 to 31 October 2022), they will be reduced if there is evidence of intention to comply.