When no choice of a superannuation fund is made by a newly hired employee, employers or their tax agents are now mandated to source the name of their new employee’s existing superannuation fund from the Australian Taxation Office (ATO). The goal of this regulatory change is to prevent the creation of unintended multiple super accounts. This will ensure individuals can continue using the superannuation fund account linked, or “stapled,” to them when they change jobs.  

The stapling requirement applies to new employees starting on or after 1 November 2021, who do not specifically elect a choice of superannuation fund.

Key details

Prior to this change, when a new employee did not fill out an ATO Standard Choice form to elect their choice of superannuation fund, the employer would enroll them in the company’s default super fund which led to many employees having multiple super fund accounts. 

When new employees do not make a choice, employers or their tax agents are now required to request the stapled super fund details for their new employees by logging into the ATO online services website and requesting the employee’s stapled fund. The stapling requirement applies to new hires on or after 1 November 2021, when:

  • Employers are required to make super guarantee payments to the new employee
  • The employee is eligible to choose a super fund but does not make a choice

New employees who make no choice regarding their preferred superannuation fund or do not have a stapled fund can continue to be enrolled by the employer to the company’s default superannuation fund.

Failure to comply with the new stapling requirement may lead to additional penalties.

Workplace determinations and enterprise agreements

Employees who are covered by an enterprise or a workplace agreement, which was signed before 1 January 2021, and contained a provision restricting the choice of super fund nomination, are not allowed to choose to which fund their superannuation contributions are paid. Those covered under such agreements after 1 January 2021, are entitled to a superannuation fund choice.

All eligible employees hired on or after 1 November 2021, will be able to choose their preferred superannuation fund regardless of when enterprise or workplace agreements were signed. Failure to make a choice will result in the application of the stapling requirement. 

Next steps

Employers may want to have a clear internal onboarding policy outlining the details of what needs to be done when hiring an employee which includes the following steps:

  • Offer an ATO choice of superannuation fund choice form to eligible employees
  • If the eligible new employee doesn’t choose a super fund, employers will need to check whether the employee has a stapled fund with the ATO
  • Enroll new employees who do not choose a super fund and do not have a stapled super fund to the company’s default fund  
  • Pay into the chosen superfund, the employees stapled fund or the company’s default super fund

Additional resources

Treasury Laws Amendment Bill 2021

Australian Taxation Office website