Superannuation reforms introduced by the Federal Government and effective from 1 November 2021 alter the superannuation choice situation for new employees.
Until 31 October 2021, employers could have contractual arrangements in place providing that a new employee’s super contributions could be paid into the employer’s default fund, where the employee does not choose a super fund into which the contributions should be paid.
Now, if the new employee either does not choose their own super fund or does not choose to use the employer’s default fund, then employers are required to request stapled super fund details from the ATO. This applies to new employees who start on or after 1 November 2021.
A stapled super fund is an existing super fund used for contributions for the new employee in a previous job. This super account will be linked, or “stapled”, to the employee so it follows them as they change jobs. The intention is to reduce account fees and avoid new super accounts being opened every time an employee commences a new job.
These obligations also apply to new contractors who are employees for super guarantee purposes (ie contractors paid mainly for their labour).
In addition, employers are required to request stapled super fund details for some employees who are not eligible to choose their own super fund. This includes employees who are:
- temporary residents; and
- covered by an enterprise agreement or workplace determination made before 1 January 2021.
Employers do not need to request stapled super fund details if the new employee chooses either their own super fund or chooses the employer default fund.
Steps for your business to be compliant
Employers should take the following steps:
- educate their HR and payroll staff about these issues, including relevant communications with job applicants who are offered positions;
- arrange for a designated person to familiarise themselves with the ATO process for obtaining stapled super fund details; and
- amend the super clause in their letters of offer/employment contracts to cater for these changes.
If you need assistance with these issues, please contact our team.
