Essential Information for Employers and Employees Regarding Superannuation Funds

Superannuation is a vital aspect of employment in Australia, ensuring financial security for employees during retirement. Both employers and employees have specific responsibilities when it comes to managing superannuation contributions.

The Super Choice Form allows employees to select the superannuation fund their employer will contribute to. As per legal requirements, employers must provide this form to new employees at the beginning of their employment. Employees can ensure that their superannuation contributions align with their needs and preferences by completing the Super Choice Form.

Starting November 1st, 2021, employers have an additional responsibility regarding superannuation funds. Suppose a new employee has yet to choose a superannuation fund. In that case, employers must contact the Australian Taxation Office (ATO) to confirm if the employee has a “stapled fund.”

A stapled fund refers to an existing superannuation account that follows an individual as they change jobs. If an employee has a stapled fund, employers must contribute to that specific fund rather than the employer’s default superannuation fund. This provision aims to reduce the prevalence of employees holding multiple superannuation accounts and mitigate the compliance fees associated with creating new accounts for each job change.

In cases where an employee fails to return the Super Choice Form, employers must take specific steps. For employees commencing work on or after November 1st, 2021, employers must request the employee’s stapled super fund details before making any super contributions. However, it’s important to note that you can only request stapled super fund details from the ATO once you have lodged at least one pay event via Single Touch Payroll for that employee.

For more information, visit ATO – Request stapled super fund details for employees.

As an employee, completing the Super Choice Form empowers you to have control over your superannuation contributions. If you choose not to complete the form as a new employee, your employer will check with the ATO to determine if you have an existing super fund. In such cases, your superannuation contributions will be paid into this fund, known as your “stapled super fund.”

It’s essential to note that if you have multiple super funds, the ATO will select one as your stapled fund, which may not necessarily be your preferred choice. Suppose the ATO cannot identify a stapled fund. Your employer will be advised to pay your super into their default super fund, as listed in Section C. For employees who began their current employment before November 1st, 2021, their super contributions will be made into their employer’s default super fund listed in Section C.

For more information about stapled super funds, visit ATO – Super.

Understanding the significance of superannuation and its obligations is crucial for employers and employees. The Super Choice Form empowers employees to select a superannuation fund that meets their needs. In contrast, stapled super funds reduce administrative burdens and promote efficiency. By adhering to these regulations, employers and employees contribute to Australia’s more streamlined and effective superannuation system.