13 October 2021
Stapling is coming: Here’s what it may mean for you
From the start of November, new superannuation regulations will come into force that will change what happens with your super when you move jobs.
‘Stapling’ rules will mean that when you change employers, your super fund will follow you to your new job, unless you take action to choose a different fund. As an Active Super member, this means we’ll be with you throughout your working life, unless you choose otherwise.
It’s quite a change from the existing rules. Traditionally, people who changed jobs would have to actively choose to stick with their existing fund or a new membership would be set up with the employer’s default fund.
The existing rules have meant many Australians have had more than one super fund, which results in more than one set of fees – and sometimes multiple insurance premiums too. In fact, ATO data shows as many as four million Australians have more than one super fund.
All other things being equal, having multiple funds and fees can erode a person’s retirement balance.
Treasury has estimated the stapling changes will result in a $2.8 billion saving over 10 years.
From 1 November 2021, when you start a new job your new employer will ask if you have chosen a super fund. Employees will still have the option to choose a fund at the start of their employment, which includes a new fund or the employer’s default fund.
If you don’t actively choose a new fund, your employer will check with the ATO if you have an existing or ‘stapled’ fund. If you regularly contribute to Active Super, we’re likely to be your stapled fund, so your contributions will continue to be paid into your existing account.
If you have multiple funds, the ATO will decide which fund is your stapled fund and will look at a number of factors to make this decision, including when the accounts were established, how recently you’ve contributed and the balance on each fund.
If you have friends or family members who are changing jobs and are unhappy with their fund, they can use this opportunity to switch to another one, like Active Super.
If you’re sticking with the same employer, nothing will change for you. You’ll still have your superannuation guarantee contributions paid into your Active Super account.
However, if you’re concerned you may have multiple accounts and are paying multiple sets of fees, ask your employer to check on your behalf and then you can consolidate your accounts.
Remember, if you’d like to build up your nest egg faster, there are a number of ways you can do so, including salary sacrifice, voluntary contributions and spousal contributions.
If you’d like to find out more about stapling or topping up your super, please contact us.