What is ‘stapled’ super?
New super rules introduced in November of 2021 mean employees are now ‘stapled’ to their existing superannuation fund, unless they choose otherwise. That’s why it’s more important than ever to consolidate your super and take control of your retirement savings. Here’s what you need to know about the super stapling rules.
From 1st November 2021, workers will automatically keep the same superannuation fund when they switch jobs unless they actively nominate a new fund.
The reform aims to limit the number of superannuation accounts Aussies accrue over their working life. Under the old system, people often received a new super account every time they changed employers. That’s a problem because having multiple accounts eats away at your retirement income, due to the fees and premiums attached to each account.
If you’ve done your homework and set up your super fund the way you want, being stapled to the one super fund can be useful. However, if you haven’t consolidated your super, or you’re not sure whether your fund is right for you, now is a perfect time to review your superannuation.
Which superannuation account will I be stapled to?
If you have more than one superannuation fund, you’ll automatically be linked to the fund that most recently received a contribution (active fund). That may not be the fund you prefer, or even the best fund for you, so it’s important to review your super.
How will my employer know which fund I’m stapled to?
When you start a new job, your employer is required to offer you a choice of superannuation fund by giving you a Superannuation Standard Choice form to fill out within 28 days of starting work. If you don’t fill out the form, they’re now required to check an ATO database to see whether you have a stapled fund. If you do, they must pay your super contributions into that fund.
What if I don’t have a stapled fund?
If you don’t have a stapled superannuation fund, and you don’t nominate a fund of your choice, your employer must pay your contributions to a new account in their default workplace super fund. This will become your stapled superannuation fund and will follow you to your next employer.
Can I still change superannuation funds?
Yes, absolutely. Employees can still open a new superannuation fund whenever they choose to. If you want your superannuation payments to go into your new super fund, you’ll need to notify your employer, usually by filling out a super Standard Choice form. The new fund you select to receive your contributions will become your new stapled superannuation fund. You don’t need to do anything to change your stapled fund, it will update automatically.
Why it’s important to consolidate your super
Consolidating your super into one account makes it easier to manage and reduces the fees you pay. That results in a higher account balance when you retire, so it’s worth doing.
Consolidating your super now also means that you’ll have the correct super fund ‘stapled’ to your profile, so it will travel with you for life.
It’s easy to consolidate your super using the Australian Taxation Office’s (ATO) online services, accessed via your MyGov account.
To discuss your superannuation goals, book a time to chat here and let’s talk over what’s best for you.
Source: Money and Life
