With the new stapling rule on our doorstep, here are the ins and outs explaining what it is and how you can stay compliant.
What is stapling?
From 1 November 2021, when an employee changes jobs, their super account will follow (or be ‘stapled’ to) them. It’s one way the Australian Government is trying to prevent multiple super accounts.
So, if a new employee doesn’t specify where they want their super paid when they start a new job, you will need to find out what their stapled fund is via the Australian Taxation Office (ATO).
If an employee has more multiple funds that can be used, the ATO will use a set of tie-breaker rules to work out their stapled fund. If they don’t have a stapled super fund and don’t choose one, you’ll need to open a default super account for them, which will then probably become their stapled fund.
How does it work?
From 1 November 2021, when a new employee starts work, you will have an extra step to consider when determining where you need to pay their super contributions:
- If a new employee provides you with a choice of fund election, you will generally need to pay their super contributions to their chosen fund1. A new employee may choose to join your employer super fund, in which case you can open a super account for them using SuperStream.
- If you don’t receive a choice of fund election form, you will need to check with the ATO whether they have a stapled fund to contribute to instead2.
- If there is no stapled fund and no choice of fund election, you’ll need to pay the employee’s super contributions to your default fund, or the fund named in your employee’s Industrial Award, Enterprise Bargaining Agreement (EBA) or Collective Bargaining Agreement (CBA).
New employees should consider what’s right for them and make an informed decision about their super. While employers can’t provide recommendations or advice about super to their employees (unless they’re licensed to provide financial advice), information about the key benefits of AMP Super is available via our induction page, where they can learn more. Employees can also use our complimentary one-on-one session with a super coach to help answer questions.
AMP support for employers
While super fund trustees can’t help with requesting stapled fund information from the ATO, we’ve made the rest of the process as easy as possible.
The new process from 1 November 2021
- All new employees can go to the employer induction page to learn more about AMP super.
- If they wish, they can then ask for a new account to be set-up for them by simply filling in the form available from the page – it only takes about 2 minutes.
- Once completed, they will be able to request their SG payments are made into that account by downloading their choice of fund form and giving it to you.
- You can then create the new member account and start making their SG payments by following the same processes you currently use.
Please watch this space – we’ll continue to update our systems over time. So, if your new employee chooses AMP super, we can help guide them through the process, making it as easy and supportive as possible.
New employees may have an existing AMP super account and want to continue to contribute to that account. If so, they can use the ATO super choice form and pass this on to you. We’ve provided easy access to the form on our induction page, already partially completed. Please note: Employees who choose this option won’t be linked to your AMP employer plan. If they do want to be linked to it, they’ll need to ask you to set up a new account for them via the process outlined above.
How to request a stapled fund from the ATO
We can’t provide stapled fund details, it must come from the ATO. Here’s how the process works:
- First, you need to make sure you’re ready by checking you have the right access to the ATO online services.
- Then, to request a stapled super fund, you’ll need to:
a. log into ATO online services.
b. enter your employee's details, including their tax file number, name, date of birth and address (only required if TFN is not provided).
- The results will appear on-screen within minutes.
- The ATO will let your employee know about the stapled super fund request and the fund details they have provided.
An authorised intermediary can request stapled fund details on behalf of an employer. Where the details are requested by an authorised representative, the employer will be notified of the outcome of the request
You can find further information, including how to make sure you have the right access from the ATO website.
Need a hand?
If you have any questions call us on 131 267 or contact your account manager.
1 Provided an employee is eligible to choose their own fund and all required information is included in the choice of fund election, the choice nomination can only be rejected if an employee has nominated a fund in the previous 12 months; however, the employer may still choose to action the request.
2 Employers will need to determine how long they can wait for a choice of fund election to be provided before requesting a stapled fund notice, depending on their contribution cycle and the length of time available before the next SG cut-off date.
What are ATO online services?
Businesses can register for ATO online services to access a range of tax and super services in one place, including to lodge your activity statements, tax returns, employment documents, keep track of super and update your details.
How do I check I have the right access for stapled fund requests?
To make sure you're ready to request stapled super fund details, check your details and access levels in ATO online services.
If you’re using an authorised representative, make sure they have full access. If not, they will need to have the Employee Commencement Form permission in order to request a stapled super fund.
How do I onboard more than 100 people at once?
A bulk request form will be available if you need to request stapled super fund details for over 100 new employees at once. Bulk requests will have a service standard of up to 5 business days.
The bulk request file can be downloaded from 1 November 2021. You will need to enter your details, your employees’ details and the details of your authorised representative if relevant.
Once the file is completed, you can submit it through the secure mail function and then, once the file is processed, you will receive a response through the secure mail function within online services.
What are the tie-breaker rules used by the ATO?
If an employee has more than one eligible super fund, the ATO has a set of rules to figure out which one is their stapled fund.
The stapled fund will be identified using the following process:
- The fund most recently identified by ATO as the stapled fund.
- If 1 does not apply, the fund that received the most recent contribution in the current or previous financial year will become the stapled fund.
- If 1 and 2 do not apply, the fund with the largest account balance at the end of the prior financial year will become the stapled fund.
- If 1,2 and 3 do not apply, the ATO must be satisfied that the selected fund is the most appropriate.
Do I need to offer all employees a choice?
No, you don’t need to offer a choice of a super fund to some employees, but you may still need to request their stapled super fund details. This includes employees who are either:
- temporary residents
- covered by an enterprise agreement or workplace determination made before 1 January 2021.
Can a stapled fund be an SMSF?
Yes, a self-managed super fund can be the stapled fund. If a stapled super fund request returns a self-managed super fund, you should obtain the electronic services address and bank account details from your employee. If the employee will not supply these details, call the ATO.
What happens if the stapled fund cannot accept contributions?
If the stapled super fund account provided by the ATO cannot accept contributions for the employee, you should make another request for the employee’s stapled super fund via ATO online services. If the same stapled super fund account is returned, call the ATO on 13 10 20 for an alternative stapled super fund account (or if there is no alternative stapled fund, the ATO may advise to make contributions to your default fund).
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What you need to know
Before deciding what’s right for you, it’s important to consider your particular circumstances and read the relevant Product Disclosure Statement, Target Market Determination or Terms and Conditions available from AMP at amp.com.au or by calling 131 267.
Any advice and information provided is general in nature, hasn’t taken your circumstances into account, and is provided by AWM Services Pty Ltd ABN 15 139 353 496 (AWM Services), which is part of the AMP group (AMP). Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.