The Federal Government recently made a few changes relevant to superannuation arrangements, a key one of which becomes effective 1st November.
From this date, when a person shifts from one employer to another, the new employer must pay the employee’s superannuation contributions into the employee’s “stapled superannuation fund”, or a different fund that the employee chooses. Under current arrangements, if the new employee does not choose a fund, the employer contributes the employee’s superannuation into the employer’s default fund.
The “super stapling” reform is designed to reduce the number of superannuation accounts individuals have, and therein reduce the total administration/management fees they pay.
For employers, it means that for any new employees commencing from 1st November who elect not to advise you of their chosen preferred fund, you need to check whether or not the employee has an existing “stapled fund”. Employers will be able to make these checks via the Australian Tax Office (ATO) portal (note also that the ATO is responsible for determining the employee’s stapled fund).
If the employee does not elect for their contributions to be sent to another fund AND you see via the ATO that they do have a stapled fund, their superannuation contributions need to be directed to the stapled fund.
If the employee does not choose a preferred fund AND they have no stapled fund AND they are covered by an enterprise bargaining agreement or modern award that prescribes a fund, contributions need to be directed to the prescribed fund. If they are not covered by an enterprise bargaining agreement or modern award that prescribes a fund, contributions need to be directed to the employer’s default fund.
All employers need to understand their new obligations, commencing 1st November, and review their onboarding procedures to ensure compliance.
This article is a useful reference, or ask your accountant/bookkeeper for further details.