Stapling – the big change coming to paying your employee’s superannuation fund. If you’re an employer, then then you need to be aware of an upcoming change when recruiting new employees.
Paying your employee’s super fund
Until now, when a new employee is hired by a business, the Choice of Fund form is used to identify where they want their superannuation to be directed. In most cases, if the employee does not identify a fund, the superannuation is directed to a default fund by the employer.
From 1 November 2021 if a super fund is not identified by the employee, employers are required to contact the ATO and request the employee’s existing super fund.
The continuation of employee’s existing fund carried across jobs is referred to as stapling – the fund being ‘stapled’ to the employee and carried across each job. For employee’s this a win. This change prevents multiple super funds from being created for a single person and inadvertently reducing their retirement savings.
The request by employer’s can be made through the ATO’s online services using the ‘Employee Commencement Form.’
What if the employee does not have an existing super fund?
If an employer has lodged the ‘Employee Commencement Form’ and the ATO confirms that no fund currently exists for the employee, contributions can be directed to one of two places:
- 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).
For existing employers or those commencing before 1 November 2021, stapling does not affect them directly.
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