Fund stapling - what does it mean?
Published 13 September 2021
On 1 November 2021, ‘fund stapling’, as legislated by the Federal Government, comes into effect. So, what does this mean for you?
What is ‘fund stapling’?
Fund stapling means that when you change jobs, your current super fund follows you to your new job, that is, your current super fund is ‘stapled’ to you. Your employer and the Australian Tax Office (ATO) will ensure your compulsory super contributions get fed into your existing fund – you don’t need to pick a new one every time you move jobs. Importantly, you can change your fund if you want to.
Whether you choose a fund or take a default fund offered by your employer, you need a fund that suits your long-term needs.
Why stapling?
Fund stapling, or stapling, is designed to stop you ‘collecting’ super funds throughout your career. This will help you avoid multiple sets of fees, less paperwork, making it easier for you to keep track of your super along with reducing the chance of paying multiple insurance premiums.If you have multiple super funds – how do you know which one is your stapled fund?
The ATO will use the following process to determine the stapled fund:
- If there’s no recently stapled fund, the fund which has received the most recent contribution will be chosen as the stapled fund
- If there’s no eligible fund that has received a contribution recently, it’ll go to the highest account balance as at the end of the last financial year
- If there’s still no eligible fund, the ATO can choose what they believe to be the most appropriate fund out of the list
What does this mean when you change jobs?
If you change jobs, you still have the option to choose your own super fund. One way to ensure your new employer contributes to your Smart Choice Super account is to simply complete the Choice of Fund form to nominate this account. This will ensure your employer contributions are made into this account.
If you don’t make a choice of super fund, your new employer will need to go to the ATO to get details of your stapled fund. If you have a stapled fund, they need to contribute to that fund unless you choose a different super fund.
The latest super reforms simplify super and give members more information about the funds they trust their future to. We believe this change, made by the Government, is in members’ best interests and will ultimately help people manage their super and save for retirement.
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This information has been prepared by OnePath Custodians Pty Limited (ABN 12 008 508 496, AFSL 238346) (OPC) as Trustee of Retirement Portfolio Service (ABN 61 808 189 263). ANZ Smart Choice Super suite of products which includes ANZ Smart Choice Super and Pension, ANZ Smart Choice Super for employers and their employees and ANZ Smart Choice Super for QBE Management Services Pty Ltd and their employees. ANZ Smart Choice Super is part of the Retirement Portfolio Service. OPC is part of the Insignia Financial Group of companies comprising Insignia Financial Ltd ABN 49 100 103 722 and its related bodies corporate (Insignia Financial Group).
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