Super stapling: What you need to know

Image of a man's hands holding a piece of paper and stapling them together. He is wearing a watch on his left wrist whilst holding the paper in his left hand, and is holding the stapler with his right hand. He is wearing a suit.

The Australian government’s Your Future, Your Super (YFYS) reform package came into effect on 1 July 2021. The YFYS reforms aim to improve efficiency, transparency and accountability within the superannuation industry. Part of these reforms include something called super stapling.

What you need to know about super stapling

In a nutshell, a stapled super fund is a single fund that is attached (or ‘stapled’) to an employee for their entire working life. It’s like your annoying kid brother who follows you around everywhere you go. No matter where you go, he’ll always be right there beside you - just like your super fund will be (with one drastic difference - your little brother is unlikely to come with a pot of money attached).

It’s worth noting that with super stapling, you aren’t locked in to that same fund forever. You can still switch to a different super fund in favour of lower fees, superior long-term investment returns, or for any other reason. Super stapling just means you’ll only ever have one single fund at a time, rather than multiple super funds on the go.

Why the super stapling change is being introduced

Super stapling is aimed at preventing the unnecessary creation of new super accounts each time you join a new employer. This will also reduce account fees associated with having multiple super funds, saving you money in the long run.

What this means for employers and the onboarding process

If a new employee doesn’t nominate a preferred super fund

If no fund has been nominated using the Superannuation Standard Choice Form, employers will need to request these details through the ATO to check whether the employee has an existing fund. This process can be done online and only takes a few minutes to return a result.

If a stapled super fund exists

Employers can pay superannuation into this fund. The employee will be notified of the stapled super fund request and the fund details that the ATO have provided.

If no stapled super fund exists

Unless the employee is subject to an EBA or modern award (meaning that their super will need to be paid into a stipulated fund), employers can then pay superannuation into their default fund.

When super stapling will come into effect

The changes to super funds will come into effect for new employees starting on or after 1 November 2021. Whilst super stapling affects all Australians, the main change will be for employers to incorporate an extra step into their onboarding process: checking whether an employee has an existing stapled super fund.

KeyPay has not yet been given the green light by the ATO to make the necessary changes for super stapling into our software, but we’ll be incorporating this as soon as we’re able to. For more information, take a look at the ATO's webcast on super stapling.

Sophie Borton-Sutherland

Marketing Manager at KeyPay

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