When your business hires a new employee, the Choice of Fund form is used to identify where they want their superannuation to be directed. If the employee does not identify a fund, generally the employer directs their superannuation into a default fund. Are you recruiting new employees? Read on for the 1 November superannuation rule changes!
From 1 November 2021, where an employee does not identify a fund, the employer is required to contact the ATO and request details of the employee’s existing superannuation fund or ‘stapled’ fund (the fund stapled to them). The request is made through the ATO’s online services through the ‘Employee Commencement Form’.
A stapled super fund is an existing super account of an employee that follows them as they change jobs.
This change aims to stop your new employees paying extra account fees for unintended super accounts set up when they start a new job.
If the ATO confirms no other fund exists for the employee, contributions can be directed to the employer’s default fund or a fund specified under a workplace determination or an enterprise agreement (if the determination was made before 1 January 2021).
Summary
What you need to do from 1 November 2021
STEP 1: Offer your eligible employees a choice of super fund
You need to give your eligible new employees a Super standard choice form and pay their super into the account they tell you on the form. Most employees are eligible to choose what fund their super goes into.
There is no change to this step of your super obligations.
STEP 2: Request stapled super fund details
If your employee doesn’t choose a super fund, you may need to log into ATO Online services and go to ‘Employee Super Accounts’ to request their stapled super fund details.
STEP 3: Pay super into a default fund
You can pay into a default fund, or another fund that meets the choice of fund obligations if:
✔️ your employee doesn’t choose a super fund, and
✔️ ATO have advised that they don’t have a stapled super fund.
The Legends at DGL are happy to assist you with these new super changes, please reach out if you have any questions!