Are you ready for the superannuation stapling obligations starting Monday 1 November?

29 October 2021

What is the requirement?

From Monday 1 November 2021, if a new onboarding employee does not nominate a preferred superannuation fund (using the Standard Choice Form), the employer is required to ask the Australian Taxation Office (ATO) if there is already a superannuation account linked (stapled) to that employee. If the employee has a stapled fund, the employer must make superannuation contributions to that fund rather than the employer’s default fund.

Why has it been introduced?

The requirement was introduced as part of the Australian Government’s Your Future Your Super Reforms1 and aims to ensure that an employee’s superannuation account follows them from one job to the next unless they make an active choice to nominate a different account. It aims to reduce account fees associated with multiple accounts and avoid a new account being opened each time an employee starts a new job.

How is the request made?

The request to identify a stapled superannuation account is made through the ATO online services once the employer enters the employee details. According to the ATO, a response will be provided on-screen within a few minutes.

If an account is identified, the employer must make contributions to that account. If no account is identified, the employer may make contributions to their default fund. The ATO will then notify the employer and employee of the outcome.

Identifying the stapled fund

If an employee has multiple previous superannuation funds, the ATO will determine which fund is ‘stapled’ by looking at factors such as, when contributions were made and the balance in the account. If the employee is not happy with the stapled fund identified by the ATO, they must then nominate a superannuation fund to the employer (they cannot request the ATO to change the stapled fund).

A choice shortfall penalty will apply where employers fail to pay funds into the fund chosen by the employee or the stapled superannuation fund (if one exists).

What should I do to prepare for the change?

As recommended by the ATO, employers should review and update access levels for their authorised representatives in the ATO’s online services so that whoever is responsible for requesting stapled superannuation fund details from 1 November 2021 has the relevant access.

More information on employers requirements is available on the ATO’s website or by contacting our Workplace Relations team.

1. These reforms were enacted by Treasury Laws Amendment (Your Future, Your Super) Bill 2021, which received royal assent on 22 June 2021.

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