New Rules for Stapled Super Fund
From 1 November 2021, all new employees that start and do not nominate a super fund will no longer be allowed to automatically use the company or organisation’s default fund. The new requirement states that the employer must use the employees ‘stapled super fund’ and requires the employer to make enquiries as to whether the employee has an existing superannuation account.
What is a stapled super fund?
A stapled super fund is an existing super account that is already linked (stapled) to an individual employee. This allows for the super fund to follow the employee as they change jobs. The aim of the stapled super fund is to reduce the account fees and avoid new super accounts being made every time a new employee starts a job. This stapled super fund can be sourced through the Australian Tax Office (ATO).
How this affects you?
The implementation of a stapled super fund should not affect existing employees. However, this will impact new employees that start on or after 1 November 2021. This will only effect employees if they do not offer a choice of super fund when commencing work.
If no super fund is nominated, the employer will need to contact the ATO regarding information about the employee’s stapled super fund.
Steps in determining which super fund to use
The employer is now required to:
1. Offer a choice of super fund to new employees;
2. If no super fund is nominated, the employer must log into the ATO online system to verify whether there is a stapled super fund for that employee;
3. If a stapled super fund exists, the employer must pay super contributions into the stapled super fund; and
4. Only if no stapled super fund exists, the employer may then pay super contributions to their default fund or a super fund of the employer’s choosing.
All documentations, including induction packs, policies or procedures will need to be updated to reflect the above moving forward. If you require assistance or further advice on this, please contact us.
For more specific information on any of the material contained in this article please contact Virginia Liu on +61 8 8210 1279 or email@example.com.
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