What you should know about upcoming changes to Super in Australia |

This November retirement pensions will improve for millions of Australians. As? The way you get employees on board and set up their funds is about to change with Super Stapling, a government initiative that is part of the broader Your Future Your Super (YFYS) reforms. This addresses the common problem of maintaining multiple super accounts and the high fees that result from it – with Australians billing $ 30 billion each year. Instead, employees have a “pinned” account that follows them when they change jobs, resulting in less account duplication, lower fees and a positive impact on their future super balance.

However, employers need to know what super stapling means to them. Take a moment to familiarize yourself with the latest from super as the busy vacation rental season is just around the corner. Here’s what you need to know and how to prepare.

Do you remind me how superannuation usually works again?

Most small business paying employees are familiar with setting up and paying Superannuation, or Super, Australia’s mandatory retirement savings program. Typically, a new employee will either provide the details of their existing fund using the super-choice form, or they will choose the default fund for your company. However, there will soon be a third part of this super-stitching process.

So what is super stapling?

A pinned super fund is an existing super account that is linked – or “pinned” – to an individual employee and follows them when they change jobs. The introduction of super stapling by the ATO means that working Australians will be tied to a super fund for life, unless they choose otherwise. This is to reduce the number of super accounts people can accumulate throughout their working lives and maximize retirement savings.

When will it start?

Super stapling begins on November 1, 2021. This means that if a new employee starts either on or after that date and does not nominate a fund by completing a Superannuation Standard Choice form, it will be according to the employee’s “pinned” fund need to search with ATO services.

Why is this being introduced?

The current pension system has become an estimated six million unintentional multiple accounts that can be a major drain on members’ retirement savings. You could be one of the millions of Australians who have consolidated their super accounts in the past or discovered a lost account. This change aims to minimize the chance of duplicate accounts and the associated fees.

How can I find and use the super stapled information?

Super stapling means adding an extra step to your onboarding process – this happens when you’re looking for a new employee’s pinned account when they haven’t nominated their own. As?

  • The ATO has created a directory via the ATO Online Services.
  • Once signed up, you will need to fill in details such as the employee’s TFN, full name, date of birth, and address to then get the details of their stapled fund.
  • If the ATO search returns a stapled fund account for your new employee, you’ll need to set it up in Xero as usual and use it for his super guarantee and any sacrifice payments.

Should I make any other changes to my onboarding process?

With the busy Christmas season almost around the corner, it’s worth reviewing your existing onboarding process so you’ll be ready when the change begins. When a new employee has not has completed a Superannuation Standard Choice form, employers must have their details (including TFN) in order to find their pinned super account. With your current process, are you getting all the documents and information you need on time? Consider if this needs updating (check out our guide to employee onboarding for inspiration).

What about my standard fund?

This process only affects new employees, so everyone on the team who is already using your default fund stays the same. If the ATO announces that there is no stacked super fund for a new employee, you can make contributions to your standard super fund (unless they are covered by an EBA or are awarded a mandatory fund). This is more likely to be the case with people who have never had super before, such as young people who are starting their careers or who have moved here from abroad.

What other changes are there in the pension insurance?

Super stapling is part of the broader Your Future Your Super reform, which aims to improve transparency, efficiency and accountability across the industry. In addition to super stapling, some of the other changes include:

  • Super Funds undergo an annual performance test by APRA and may not be able to accept new members if they are unsuccessful
  • The ATO will create a new interactive online YourSuper comparison tool to help consumers see if their fund is underperforming

Where can I find more information?

The ATO has further details on super stapling available for employers. Keep an eye out for future updates from Xero as we will keep you informed of upcoming changes.

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