Have you heard about the new “Super Stapling” Legislation?
From 1 November 2021, employers need to comply with the new ‘super stapling’ requirements that will require a change to new employee onboarding processes.
What is ‘super stapling’?
Under the “super stapling” reforms, when a person moves jobs their existing superannuation account will be ‘stapled’ to them. This means their new employer must pay contributions into the ‘stapled fund’ unless the member chooses for their contributions to go to a different fund.
Under the previous superannuation system, when an employee commences employment with a new employer and they don’t choose a superannuation fund for payment of their super contributions, contributions are paid to the “default” superannuation product chosen by the employer. This means that a person who changes jobs and does not exercise a choice of fund, will typically have more than one superannuation account.
‘Super stapling’ is part of a package of reforms to the superannuation system announced in the Federal Budget in 2020 which were aimed at tackling the issue of Australians having multiple superannuation accounts which erode their retirement savings.
It only applies to new employees who commence from 1st November 2021. There is no change for existing employees.
What do I need to do?
From 1st November 2021, if a new employee does not exercise their choice of fund, you will need to check if the employee has an existing stapled fund. You can do this by logging into ATO online services and enter the relevant employee details to request information on the employee’s stapled fund. An employer will need to have lodged either a Single Touch Payroll event or a Tax file number declaration for the employee to make the request
Generally, if the employee does not exercise choice and has a stapled fund, the employer will be required to contribute to the employee’s stapled fund to meet their Superannuation Guarantee (SG) obligations.
For more information on “Super Stapling” and what this means for your business visit: https://www.ato.gov.au/General/New-legislation/In-detail/Super/Super-Reforms—Your-Future,-Your-Super/