From 1 November 2021, if an employer has new employees start and the employees do not choose a super fund, employers may have an extra step to take to comply with choice of fund rules. The employer may now have to request their new employees 'stapled super fund' details from us.
A stapled super fund is an existing super account which is linked, or 'stapled', to an individual employee so that it follows them as they change jobs.
The change aims to stop new super accounts from being opened every time an employee starts a new job.
How will a stapled super fund be selected?
The stapled super fund selection will be based on information we hold about the employee's super fund membership, as reported to us by funds.
If an employee holds an existing eligible super account, this will be notified to the employer as the stapled super fund account for contributions.
To be eligible to be selected as a stapled super fund for an employee, a fund 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.
Where an employee has multiple existing eligible super accounts, we will apply 'tiebreaker' rules as outlined in the regulations to select the stapled super fund. These rules consider, as applicable:
- whether we have 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.
If a member is concerned how the tiebreaker rules will be applied, they should be encouraged to use a super standard choice form to nominate their preferred fund.
Defined Benefit Accounts
Any fund, including a defined benefit fund, can be provided to an employer by the ATO as a stapled super fund. However, some defined benefit accounts may not be able to accept contributions from all employers. If an employer advises us that a stapled super fund notified by us cannot accept contributions, we will provide an alternate stapled super fund if the employee has another stapled super fund.
Successor Fund Transfers
A successor fund meets certain conditions and confers certain rights on the member. A superannuation interest may be transferred from an employee's super fund account, default fund or stapled super fund to a successor fund without the consent of the member. Contributions by the employer to the successor fund for the benefit of the employee will satisfy the choice of fund requirements and the employer will not need to give the employee a standard choice form or request a stapled super fund.
If the employer requests a stapled super fund, the account details returned by the us will follow the tiebreaker rules outlined above.
Encouraging choice of super fund
The new stapled super fund step only applies from 1 November 2021 when a new employee does not choose their own super fund.
You can support your members to choose their own super fund by:
- helping them to understand the super standard choice form
- reminding them of the benefits of choosing their own super fund and keeping track of their super
- directing them to Super for individuals to understand how they can find their super fund details to complete their super standard choice form.
You should offer members the newest copy of the Superannuation standard choice form to elect their choice of super fund.
You can't provide recommendations or advice about super to your members, unless you are licensed by the Australian Securities & Investments Commission (ASIC) to provide financial advice. Visit ASIC Communicating with employees about choice of superannuation fund: What you can and cannot doExternal Link for more information on how you can communicate about superannuation choices without breaking the law.
For more information see offering employees a choice of super fund.
Information for Super Funds on the Single Default Account (stapled super fund) changes.