Important changes to employer obligations for employee superannuation from November 2021

From 1 November 2021, if you have new employees start, you may have an extra step to take to comply if they don’t specify a super fund. Luckily it’s only a minor tweak and won’t add substantial effort to your employee onboarding process.

What has changed?

Where a new employee does not specify a super fund, employers must make super contributions to the employee’s “stapled fund”. Previously, the employer could simply direct super contributions to their default fund. This is designed to avoid the creation of new super funds for employees as they move around different jobs, and instead, encourage the use of a single super fund.

What is a stapled fund?

A stapled super fund is simply an existing super account that is linked, or ‘stapled’, to an individual employee so that it follows them as they change jobs.

1. What employers need to do Existing employees with a start date up to and including 31 October 2021

• No action is required

2. New employees starting from 1 November 2021 onwards

• Continue to provide your new employees with a Superannuation Standard Choice Form

• Where your new employee does not choose a super fund, login to ATO Online Services and request their stapled fund details (see below)

• If no fund is chosen and no stapled fund exists, then you may use your default super fund

• Enter the appropriate super fund details into your payroll system (ie Xero) and process/pay superannuation as per usual

How to identify if an employee has a stapled fund

Using the ATO online services, employers can request their employees’ Stapled Super fund after they have submitted Tax File Number Declaration or an STP event. 

To request these details, the employer will need to log in to ATO Portal and submit the new employee details including TFN, name, date of birth, and address. The ATO will then look up the employee record and either return the stapled fund details or advise that no stapled fund exists.

This is expected that the Stapled Super fund will be available via online services very soon after submitting the information.

Bulk requests can be made to ATO for up to 100 new employees. 

Your accountant or bookkeeper can also request this information on your behalf from the ATO.  

What to do next

• Ensure you have access to ATO Online Services 
• Continue to provide your new employees with a Superannuation Standard Choice Form 
• Update your employee onboarding process to check for a stapled fund where the employee does not specify a chosen fund. 
• Only where no fund is specified and no stapled fund exists, can you continue to make contributions for new employees to your default superannuation fund. 

Reach out to Link Books if you require any assistance around this new requirement for employers.