Govt’s subtle change to super stapling regime

The Federal Government will use the legislation underpinning the delivery of payday superannuation to alter the dynamics of the superannuation fund stapling regime.

The Government changes appear intended to ensure that employees are given a clear-cut opportunity to unstaple and choose another fund when they change jobs.

The Treasurer, Jim Chalmers, indicated the changes in his announcements around payday superannuation, and an examination of Treasury’s explanatory materials has made clear the approach.

Those materials point to “revised choice of fund rules” to make it easier for employees to nominate their superannuation fund when they start a new job.

Those revised rules will ensure employers show employees their existing ‘stapled’ fund during the employment onboarding process “as part of the choice of fund”. Under the current regime, employers are required to find out an employee’s stapled fund before offering them a default fund.

Under the current regime, employers are required to obtain the name of an employee’s stapled fund from the Australian Taxation Office (ATO).

The Treasury documentation said the change of practice would reduce the risk of unintended duplicate accounts and give employers more timely and accurate details.

It said that advertising of superannuation products during onboarding will be limited to MySuper products that have passed the most recent performance test to protect employees from poor outcomes.

The superannuation fund stapling arrangements were introduced under the former Coalition Government with the intention of reducing the risk of people unwittingly holding multiple superannuation accounts.