Super stapling: what does it mean?

A stapled super fund is an existing super account that is linked – or “stapled” – to you so it follows you whenever you change jobs. The aim is to prevent you having multiple super accounts opened for you throughout your career.

If you change jobs, you will generally be allowed to choose whether you want to stay with your existing fund, join your employer’s preferred super fund or pick a new one altogether.

From November 2021, new rules mean if you don’t make a decision, your new employer must ask for details about your stapled super fund, if you have one. An employer can’t just start an account for you with its preferred super fund.

If you don’t provide your new employer with details of your stapled super fund – or any other preferred super fund you have – then it may approach the Australian Taxation Office (ATO) for help.

What is my stapled super fund?

Your stapled super fund will be selected by the ATO based on information it holds about your super fund membership, as reported to it by any super funds you’re a member of.

If you have a single existing super account then the ATO will tell your employer this is your stapled super fund account for contributions.

If you live and work in Australia your employer usually has to pay the minimum Superannuation Guarantee (SG) into this fund if you’re at least 18 years old and earn $450 or more before tax in salary or wages (including overtime) in a calendar month. That $450 rule is due to be scrapped from 1 July, 2022. If you’re under 18, you must also work at least 30 hours a week to be entitled to the SG.

“Generally, if the employee does not exercise choice and has a stapled fund, the employer will be required to contribute to the employee’s stapled fund to meet their Superannuation Guarantee (SG) obligations,” said law firm MinterEllison.

If you have more than one super account, the ATO says it will apply “tiebreaker” rules to determine which fund to nominate as your stapled fund.

To do this it will consider things such as whether it’s previously identified one of your accounts as a stapled super fund, when any contributions were last made to the accounts, how recently the accounts were created and how much money there is in each of them.

Only if you don’t have an existing super fund and don’t make a choice as to what fund you want to join when starting a new job can your employer pay your super contributions into its nominated default fund for you.

Can I change my stapled super fund?

You can’t choose which of your multiple accounts is your stapled super fund, the ATO told Canstar. So if you’re concerned about how any tiebreaker rule may be applied then it suggests you fill out the superannuation standard choice form to tell your new employer which is your preferred super account.

Should I stick with my stapled super fund?

When changing jobs you may want to look at what super options are available to you from your new employer. You may find that your employer’s preferred super fund has options that are more attractive than your existing, stapled super fund. Or you may want to look at other super fund options to see what they have to offer.

You should compare super funds on factors such as their fees, long-term performance and any insurance options on offer. Check to see how each super fund you’re considering is performing.

But remember, past performance is not a reliable indication of future performance.

Read more: How to choose a super fund

Make sure you check though before opting to switch super funds. Read carefully any product disclosure statement (PDS), target market determination (TMD) and other documentation associated with your existing and potential new super funds.

You may wish to seek some professional financial advice.

If you find you have multiple super accounts then you may consider consolidating them into one, which could potentially save you in time and fees. You may not be able to consolidate some super accounts. Check which accounts would most suit your needs and whether you’d lose any benefits, such as life insurance, by closing a super account.

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