ATO's New Stapled Super Fund Rules Introduced - Information for Employers
‘Superannuation stapling’ is a new measure that was introduced as part of a package of reforms to the superannuation system announced in the 2020/21 Federal Budget.
Under this measure, an existing superannuation account is linked, or ‘stapled’, to an individual employee so that it follows them as they change jobs. This avoids the creation of a new superannuation account each time a person changes their employment.
Broadly, the new rules require employers to use the ‘stapled super fund’ details (instead of the employer’s default fund) for new employees who do not choose a fund. These changes only apply to new employees who commence work on or after 1 November 2021 (i.e., existing employees are not affected by the new rules).
Employers must generally provide new employees with a superannuation Standard Choice Form within 28 days of commencing work. From 1 November 2021, if a new employee does not choose a fund, then the employer will need to check if the employee has an existing stapled fund by logging into ATO online services and accessing the ‘stapled super fund request service’. The ATO has advised that once all the required information is provided and the request is made, the result of the stapled super fund request should be available on-screen within minutes.
Where the employee has a stapled fund, the employer will be required to contribute to the employee’s stapled fund. If an employer makes contributions into their default fund for a new employee rather than checking with the ATO to see if the employee has a stapled super fund, then they may be subject to the choice shortfall penalty.
Importantly, there is no need to request stapled super fund details from the ATO for:
- existing employees (i.e., those who commenced work before 1 November 2021); or
- new employees (who commence work on or after 1 November 2021) and have chosen a superannuation fund.
Employees will also be notified by the ATO of the stapled super fund request made in relation to them and will be advised of the details provided by the ATO to the employer. The ATO will be monitoring the ‘stapled super fund request service’ to ensure that employers are using it appropriately and making genuine requests for stapled super fund details. Employers who use the service incorrectly (e.g., to request information for employees who started work before 1 November 2021) may have their access to the service removed.
More information about an employer’s obligations with regards to stapled super funds can be found here on the ATO’s website.
As always, if you have any queries in relation to this, don't hesitate to contact us.
Courtesy National Tax & Accountants’ Association Ltd
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