From 1 November 2021, the Your Future Your Super (YFYS) legislation will see individuals ‘stapled’ to the first super fund they join. They will be linked to this super fund and it will follow them throughout their working life – unless they choose a different fund.
While there are several reforms including a Your Super online comparison tool and an annual performance test, stapling will have the biggest impact for employers and those changing jobs.
What you need to do
• You must provide a new employee with a Choice of Fund form (like the Cbus choice of super fund form found on the Cbus website or the ATO Standard Choice Form) within 28 days of them starting.
• New employees can choose to join your default super fund or nominate their preferred super fund by completing a Choice of Fund form.
• If a new employee doesn’t make an active choice of fund, you’ll need to use ATO Online Services to determine their stapled super fund.
• You must use ATO Online Services to determine a new employee’s stapled fund.
• If a new employee has more than one super fund, the ATO will determine the employee’s stapled fund based on a set of rules (the rules act as a tiebreaker). These may include factors such as when the account was created, how recently contributions were made and the account balance.
• If a new employee doesn’t have a stapled fund and doesn’t make an active choice of fund, you must pay their super into your default super fund.
When you can request stapled fund information
• You can’t use ATO Online Services to look for your new employee’s stapled fund if they haven’t started work. They must be employed by you when you request the stapled fund information (you can only make the request from the first day they are on your site and on payroll). To make a request, you must have lodged either a Single Touch Payroll event or a TFN declaration.
• You will need to request the stapled fund information for a new employee if they haven’t provided you with a Choice of Fund form.
When you request a new employee’s stapled fund information from the ATO, your new employee will receive notification of your request.
How does this impact workers in building and construction?
In the building and construction industry, stapling could have serious implications for employees’ insurance on work sites.
Young and low balance members new to the industry could be ‘stapled’ to a fund that does not offer default insurance appropriate for the hazardous nature of their work and therefore are at risk of being uninsured in the workplace.
The claim time is not the right time for your employee to discover they don’t have that cover.
Employers still need a default fund
If Cbus is your default fund, you can:
• let new employees know that Cbus is your default fund, and provide them with a Cbus Product Disclosure Statement and a Choice of Fund form (like our Cbus Choice of fund form).
• recommend or encourage new employees join Cbus.
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