Super Fund Stapling

From November 1st, employers can no longer ‘automatically’ sign new staff up into their default or industry fund.

All individuals working will have a fund ‘stapled’ to their tax file number. What this means is when a person changes jobs the current super fund follows them to their new job. The Australian Tax Office will be responsible for identifying an individuals stapled fund.

What does this mean for you and your new employees joining your workplace from 1 November?

The most significant change from 1 November 2021 is employers can only open a new super account for an employee within their default plan if the employee:

• actively selects that fund, or
• does not have an existing super fund.

An employee can only actively select the fund by completing the super choice form.

This will potentially see delays in setting up new employees for some business as they will need to get this info from the employee.

Payroll software companies are working with the ATO around these requirements.

What employers need to do from 1 November 2021

1. Provide new employees with Choice of Fund, either via a form (Standard Choice form),  or via any existing employer onboarding process.
2. Pay new employee’s super into the account nominated on the Choice of Fund form.

What happens if a new employee doesn’t nominate a choice of fund?

If a new employee doesn’t choose a super fund, employers will need to undertake a ‘stapling check’ via the ATO website.

The ATO will ask employers to confirm an employment relationship exists with the employer and new employee.

Once confirmed, the employer may search for an employee’s stapled super fund. The ATO portal will confirm one of the two following outcomes:

• Stapled fund found: You must pay superannuation guarantee contributions to that fund unless your employee gives you a valid Choice of Fund form.
• No stapled fund found: You can set the new employee up in your default super fund and pay contributions into their new account.

ATO – requesting stapled super fund details

Step 2: Request stapled super fund details

If your employee doesn’t choose a super fund, you may need to log into our online services to request their stapled super fund details. A tax practitioner can also do this for you.

You’ll be able to request your employee’s stapled super fund after you have submitted a Tax file number declaration or Single Touch Payroll pay event, which identifies that you have an employment relationship.

There is no limit to the number of requests you can make.

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

• Log into ATO online services and 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.

The online system will use rules based on the regulations to work out and return a stapled super fund in response to a request.

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

The ATO will notify your employee of the stapled super fund request and the fund details they have provided.