Stapling was introduced on 1 November 2021 to limit unintended new super accounts being opened for workers every time they change jobs. This generally means an employee’s existing super fund is now ‘stapled’ to them for the duration of their career, unless they choose another fund.
To play their part, employers have to take an extra step of searching for a stapled fund where a new employee does not choose a super fund. Failure to do so may mean employers have to pay the choice shortfall penalty.
Given the scope of the change, the ATO signaled it would support employers during the early phases of transition. But now that it’s been about a year since stapling was introduced, we thought it timely to give you a refresher and links to additional resources should you need them.
Why the change?
Before super stapling, when an employee started a new job and didn’t choose a super fund, the employer would typically open a new account for them in the company’s default super fund. This resulted in multiple super accounts being created for a person during the course of their career, which may not have been in their best financial interest if unnecessary duplicate fees and insurance premiums were paid on unintended multiple super accounts.
Stapling was introduced to help resolve this problem by linking a single super fund to a worker for life, unless they made an active decision to choose another fund.
When do you need to complete a stapled fund search?
In most circumstances, you only need to conduct a stapled fund search when a new employee does not choose a super fund. When this happens, a search will confirm whether the employee has an existing stapled fund so super contributions can be paid into that account, rather than opening a new account.
|Stapled fund search required||Stapled fund search not required|
|You need to complete a stapled fund search when a new employee joins your company and does not complete a Choice of Fund Form.
If the ATO confirms they have a stapled fund you need to pay super contributions into that account. If they don’t have a stapled fund you can pay their contributions into your employer default fund, unless a state or industrial award specifies where their super must be paid.
|If your employee completes a Choice of Fund Form and chooses their own super fund or your default fund, you don’t need to request stapled super fund details for them.
Remember that you are not obligated to complete stapled fund searches for employees who started with your company before 1 November 2021.
How to complete a stapled fund search
If a new employee does not complete a Choice of Fund Form you will need to conduct a stapled fund search via ATO online services. Once you have logged in you can open a request form, enter your employee’s details and submit your query.
There is no limit to the number of individual requests you can make and there is a bulk request form if you need to process a large number of queries at once.
To help guide you through the process, the ATO has published a reference guide for employers which you can download here.
Rest is here to help with your onboarding process
Stapling makes it more important than ever for your employees to make the right choice about their super fund because it may be ‘stapled’ to them for life. As their employer, you can play a crucial role in helping your new starters make an informed choice about super during their onboarding process by giving them factual information about super, choice of fund options and your default super fund, and encouraging them to learn more and seek advice from a financial adviser.
When helping your employees with their choice of super fund during onboarding, you need to be careful not to give financial product advice by recommending or influencing them to choose a particular super fund. At Rest, we work closely with employers to ensure the super component of onboarding is as simple and informative as possible. We’ve created a super toolkit for employers whose onboarding process is digital, as well as a printable version for those who use a paper-based approach. You can find these useful resources on our onboarding page.
Further information to support you
Visit Rest’s web page that features employer Q&As on stapling and a recorded webinar with a panel of speakers.
The ATO provides information on stapling which includes a guide for employers.
If you have any additional questions about stapling, feel free to contact us.