New legislation for superannuation will start on 1 November 2021. When onboarding new employees, employers will no longer create new super accounts for them. Instead, employers will have to contact ATO and ask for the employees’ stapled super fund details.

What is a ‘stapled super fund’?

A stapled super fund is linked (or stapled) to an employee. When employees change jobs, this stapled super fund will follow them wherever they transfer. There will no longer be new super accounts created every time an employee changes jobs.

What is the new onboarding process?

1. An employee may choose their own super fund.

Employers can encourage new employees to choose their super fund, allowing them to choose how their savings are invested, and which fund best suits their financial plans.

To help them better understand super, you can direct them to the ATO website:

• Super for individuals
• Choosing a super fund

And here’s the superannuation standard choice form, along with other information you may need.

When the new employee chooses their super fund using the ATO superannuation standard choice form, employers don’t need to contact ATO to confirm. Keep a copy of the form and proceed with making contributions to the elected super fund.

2. If the new employee doesn’t choose their own super fund, then the employer will have to call ATO for the stapled fund details.

ATO will select a stapled super fund for the employee, based on the information they have about the employee’s existing funds. If there are multiple eligible funds, it’s up to ATO to apply tiebreaker rules and determine the stapled fund.

If there is no stapled super fund, then the employer can make contributions to their default fund instead.

How does this affect existing employees?

It doesn’t affect them. Employers should continue making payments to the super fund already being used.

Can my employee choose to change their super fund?

Definitely. Employees can change their chosen fund. In fact, having a new job is a perfect time to assess whether their current stapled fund is the best choice. Employers can also tell new employees of the benefits of their own default fund so that they have all the information they need to make an informed choice.

If you need more information on stapled super funds, check out this article from ATO: Stapled Super Fund Details for APRA Funds