This year has seen a lot of changes to the rules governing superannuation funds and their own providers by the Federal Government that may have an effect on how you as an employer deal with super.
Are you knowledgeable of the changes to “choice of fund” rules that you might require to be aware of as an employer of new to the workforce employees?
Right now, as an employer, you may be having to pay contributions to your new employees into a default superannuation fund of your choice if they have been unsuccessful to provide you with their own selection of superannuation fund details. This may be due to not needing a superannuation fund (as in, the employee is new to the workforce), or as a result of other circumstances.
As an employer, you must give all new employees a Superannuation standard selection form within 28 days of their start date. They may also be provided with one if:
They as an employee request one
You are not able to contribute to their own chosen fund, or it is no longer a complying fund
You switch the employer-nominated fund into which you pay for the employee’s contributions.
If the employee secures a temporary working visa or their super fund undergoes a merger or acquisition, they will not be able to pick their super fund themselves.
From 1 November 2021, if you have new employees get started and they don’t choose a certain super fund, you may need to inquire about their ‘stapled super fund’ details from the Australian Taxation Office.
A stapled super fund is an active account that is linked, or ‘stapled’ to an individual employee, so it comes after them as they change jobs. This change aims to lower the number of additional super accounts started out each time they start a new job. If a new employee does not have a stapled fund and they do not decide on a fund, the employee’s super can be paid into the employer’s default fund.
With a lower number of superannuation funds being started out, employees are less likely to generate ‘lost super’ as they transition through their employment time periods and various careers leading up to their retirement.
As an employer, you’ll be able to request stapled super fund info for new employees using the ATO’s Online services for business.
To get ready for this change, you can test and update the access levels of your business’ authorised representatives (such as your accountant or bookkeeper) in Online services. This will indicate you’re ready to request stapled super funds if needed. It will also help in keeping your employees’ personal information.
As an employer, you legally are unable to provide your employees with recommendations or advice about super except you are licensed by ASIC to provide financial advice. You can allow your employees information about picking out a fund, however, including:
Why do they require to choose a super fund?
The process of choosing a super fund.
Your obligations as an employer are to pay for the super guarantee and provide a default fund to pay into
How they can nominate their chosen fund
Keep in mind, registered tax agents and BAS agents like us can allow you with your tax and super queries. Come and speak with us about your solutions, and make sure that that you are compliant with your super requirements as an employer.
If you are a brand-new employee entering into the workforce, and you’d like to know even more about your options when it is available to superannuation, you will need to have a serious discussion with service providers and run your own independent research on the funds available.