If you are recruiting new employees you need to know about some changes.

When a business hires a new employee, the Choice of Fund form is used to identify where the employee wants their superannuation to be directed. If the employee does not identify a fund, generally the employer directs their superannuation into a default fund.

From 1 November 2021, where an employee does not identify a fund, the employer is required to contact the ATO and request details of the employee’s existing superannuation fund or ‘stapled’ fund (the fund stapled to them). The request is made through the ATO’s online services through the ‘Employee Commencement Form’.

If the ATO confirms no other fund exists for the employee, contributions can be directed to the employer’s default fund or a fund specified under a workplace determination or an enterprise agreement (if the determination was made before 1 January 2021).

What is a ‘stapled super fund’?

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.

Why the need to change?

The change is simply trying to reduce account fees by stopping new super accounts from being opened every time an employee starts a new job. This effectively will limit the number of superannuation accounts an employee can gather over their working life. This should make superannuation easier for all employees.

When do the changes start?

These new rules commenced from 1 November 2021.

How do I obtain an employee’s stapled super fund details?

If the eligible employee has not chosen a superannuation fund, the employer will need to contact the ATO to request this information. This can be done by logging into the ATO Online Services and accessing the ‘Employee Super Accounts’ section. Registered Tax Agents can also do this on the employer’s behalf.

This information ca be requested after a Tax File Number Declaration or a Single Touch Payroll (STP) pay event linking the employee to the employer has been submitted to the ATO.

There is also the ability to make a bulk request for over 100 employees at once. More details on how to access this information is available from the ATO here.

What if the ATO doesn’t have a stapled super fund for the employee?

If the employee has not made a choice and does not have a stapled super fund recorded with the ATO, the employer will be able to make the super payments to their own default fund.

What happens if the super choice rules aren’t followed by employers?

If the employer does not give an eligible employee the choice of super fund then the employer could receive a ‘choice liability’ penalty. The choice liability penalty may increase the SGC.

A choice liability penalty may be applied by the ATO if the employer:

  • charges employees a fee for implementing their choice of fund;
  • does not provide a Superannuation Standard Choice Form within the required timeframe to eligible employees; or
  • the employee’s super is paid into a complying superannuation fund that they did not nominate and/or is not their stapled super fund.

If you need help navigating this or contacting the ATO, the TSP team are here to assist. Just contact us on 49 264155 or email admin@tspaccountants.com.au