Super stapling

What is super stapling?

From 1 November 2021, employees became ‘stapled’ to their existing super accounts. This means that when a new employee doesn’t choose a super fund, their employer must pay super contributions into their existing account (stapled fund).

How does it work?

Employers must offer their employees a choice of super fund to meet their superannuation obligations by providing new employees with a superannuation Standard Choice form (either a hardcopy or through the ATO via myGov) within 28 days of starting at the company.

If an employee doesn’t choose a fund, employers must use an ATO database to check if the employee has a stapled (existing) fund. If a stapled fund exists, super contributions must be paid into that fund.

Where a new employee hasn’t chosen a fund and doesn’t have a stapled fund, super contributions must be made to a new account in the workplace default super fund.

Why the change?

The new rules are designed to reduce the chance of workers accumulating multiple super accounts after moving from one job to another. Having more than one super account can be costly for employees, as it can mean they are paying multiple sets of fees and insurance premiums.

Can employees choose to change their super fund?

Absolutely. Employees will always have the ability to change funds if they wish. If they do, their new fund will become their stapled fund. Employees will still need to notify their employer if they do change super funds.

What if my employee already has more than one super account?

If an employee has more than one fund, they will be automatically stapled to the one that has been active (received a contribution) most recently. Where there is more than one active fund rules will be applied to select the most appropriate fund, for example, the fund with the biggest balance.

Do employers still need to have their own default or preferred funds?

Yes. If a new staff member is not already a member of a superannuation fund, then their employer is generally required to offer them choice of fund and if they don't choose a fund they will sign them up to the company's default fund, which will then become their stapled fund.