In another Bill passed by the Parliament today (still has to go back to the House of Reps to approve amendments but this is pretty much a formality), the rules regarding default funds in choice of super has been changed for any employee starting employment on or after 1 NOVEMBER 2021…
Under the changes, to comply with the choice of fund rules an employer must make super contributions to the “stapled fund” of an employee who:
- started their employment on or after 1 November 2021;
- has a stapled fund; and
- has not chosen a fund to receive superannuation contributions.
Putting it another way, where the employment started on or after 1 November 2021, the employer will not comply with the choice of fund rules by making contributions to either of the following if the employee has not chosen a fund but the employee has a stapled fund:
- the default fund chosen by the employer; or
- a fund specified under a workplace determination or an enterprise agreement.
For these new employees, employers will only make contributions to the employers default fund if the employee has not made a choice and the employer has contacted the ATO and confirmed the employee does not already have a stapled fund.
What is a stapled fund? It is a MySuper product that the employee already has. But you don’t need to know this as it is up to the ATO to tell you (when you ask) is any specific employee has a stapled fund.
I assume the ATO will be ready for us to contact them to get this information in real time well before Q1 in the 2022 financial year so we can make our super payments.
And just to answer every question that comes from this… What if they have two stapled funds? Contribute to the one the ATO tells you is their stapled fund. What if the Commissioner says they have a stapled fund but the employee knows nothing about that fund? Contribute to the stapled fund the ATO tells you to contribute to…
The take away message is that for any new employee from 1 November 2021, if they do not chose a super fund, you contact the ATO to find out what fund you should contribute to. Only if the ATO says they can’t find a stapled fund do you contribute to your employer default fund.
How do you contact the ATO to get this information? The Bill, while passed by the Parliament, is not law until the GG signs it so even the ATO can’t answer that question yet.
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