There is a new rule in super, and it could affect those changing jobs.
As of November 1, 2021, where new employees do not choose a super fund, most employers will have to check with the ATO if their employee has an existing super account, and pay the employee super directly into that super account, known as a ‘stapled super fund’.
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.
What is the advantage of a stapled super fund?
The aim of stapling super funds is to reduce duplicate account fees and avoid new super accounts being made every time a new employee starts a job. Avoiding duplicate fees saves costs and means potentially having more money compound in your super account over many decades.
What does an employer need to do?
From 1st November, an employer needs to do the following:
- Offer a choice of super fund to a new employee
- If the employe does not nominate a super fund, the employer must login to the ATO online system to check whether there is a stapled super fund for that employee
- If a stapled super fund exists, the employer must pay the employee’s super contributions into the stapled super fund
The employer can only pay super contributions to their default fund or super fund of the employer’s choosing if no staple fund exists for the employee.
The benefit of avoiding multiple fees can really add up in the long term
It doesn’t matter whether the duplicate fees are small or large, they all add up over time. These rules are designed to benefit the employee, and to ensure all of our super adds up over the course of our careers. Afterall, who doesn’t want a little bit extra for retirement 😊
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