Changes for paying super to employees

Important info for employers 

As a result of YFYS, every time a person starts a new job, their employer has to offer them two superannuation options. Either having their compulsory superannuation guarantee contributions deposited into the employer’s default super fund, or in an alternative fund of the employee’s choosing. 

From November 2021, the legislation ensures that unless an employee chooses otherwise, their active super account — or the first fund they join when they start work — will follow them throughout their working life, no matter the job or the industry they are working in or if the fund is a poor-performing fund. In other words, the employee has one fund for life. 

In the legislation, this is called “member stapling”, and its purpose is to prevent a person having multiple super funds. Multiple funds have multiple fees and unnecessarily reduce retirement savings. This is the important part — it’s an employer’s responsibility to search and check with the ATO if their new employee has a “stapled” super fund and ensure that future SG contributions are paid into it.

Want to know more?

As an employer, it’s hard to stay on top of the Government’s constantly evolving legislations and legalities. We can help you straighten things out and get a clear picture of your responsibilities to your employees. Contact us to get started.