If you’re an employer, you may have heard that any new employees you take on [from November 2021] must have their super contributions paid into their existing ‘stapled’ fund regardless of your existing workplace determination or if there’s an enterprise agreement in place.

By having a single ‘stapled’ fund, members will avoid having multiple accounts that can erode their member balances through unnecessary fees and insurances.

This has come about after a number of recommendations from the Productivity Commission Superannuation Inquiry and Financial Services Royal Commission were put forward and the ‘Your Super, Your Future’ package that was announced in the 2020-21 Federal Budget.

What is a ‘stapled fund’?

  • An existing fund which is linked or ‘stapled’ to an individual employee so that it follows them as they change jobs.
  • It must be an open retirement savings account [RSA], complying superannuation fund or complying superannuation scheme in the same financial year as the stapled super fund request is made.
  • The employee must be a member of the fund/scheme, or holder of that RSA, when the request is made.

Can employers independently determine whether a fund is a ‘stapled fund’?

No. A new employee can advise who their chosen fund is [and this overrides the ‘stapled fund’], or the employer can use ATO online services to request the employees stapled fund details.

How do I request an employee’s stapled fund details?

To request a stapled super fund, you, or your authorised representative, need to:

  1. Log into ATO online services for business
  2. Navigate to the ‘Employee super account’ screen via the ‘Employees’ menu and select ‘Request’ to open the form
  3. Enter your employee’s details, including their:
    • TFN – an exemption code can be entered where an employee can’t provide their TFN, but this could result in processing delays
    • Full name – including ‘other given name’ if known
    • Date of birth
    • Address [residential or postal], if TFN not given
  1. Read and click the declaration to sign it. You’ll also be able to tick a box under ‘more employees to request?’ to request stapled super fund details for additional employees
  1. Submit your request.

You should be notified of the result of the stapled super fund request [on-screen] within minutes.

What to do if the employee has an existing ‘stapled fund’?

  • From 1 November 2021, employers are required to pay contributions to that existing fund if the employee does not choose their own super fund.
  • This applies even if an existing workplace determination or enterprise agreement is already in place

If you are advised by the ATO that the employee does not have an existing ‘stapled fund’, an employer can opt to either:

  • Pay contributions into a default fund chosen by the employer
  • Pay contributions into a fund specified under a workplace determination or enterprise agreement made before 1 January 2021.

What happens if the employee has multiple existing super funds?

The stapled fund selected by the ATO will be based on information they hold about the employee’s super fund membership, as reported to the ATO by the funds.

If an employee has multiple existing funds, the ATO uses tie-breaker rules for selecting a single fund. These rules consider, as applicable:

  • Whether the ATO has previously identified an account as a stapled super fund
  • How recently contributions have been made to each of the accounts
  • The account balances
  • How recently each of the accounts were created.

Steps to follow when onboarding a new employee

Stapled funds should be used when an employee does not choose their own superannuation fund for you to pay superannuation guarantee amounts into.

For new employees, the super fund used by an employer to pay contributions into should be applied in the following order:

  1. Ask the employee to provide details of their chosen super fund using the Superannuation standard choice form
  2. If a fund is not chosen, use ATO Online Services to obtain details of the employee’s stapled super fund.
  3. Pay contributions into a default fund chosen by the employer
  4. Pay contributions into a fund specified under a workplace determination or enterprise agreement made before 1 January 2021.

Handy resources

You can get more information about Stapled super funds for employers from the ATO here.

Details on how to request stapled fund details for an employee can be found here.

You should encourage employees to choose their own Superfund by offering them the newest copy of the Superannuation standard choice form to elect their choice of super fund.

If you have any queries or concerns, or would like the help of our bookkeeping or accounting consultants, please do not hesitate to give us a buzz on 1300 BDEPOT or email oneplace@businessdepot.com.au.