Your Future, Your Super – for employers

Your Future, Your Super – for employers

Super stapling has started
Find out what this means for you and your new employees.

We’re here to explain what the Your Future, Your Super reforms, including stapling, mean for you as an employer.

Your Future, Your Super (YFYS) contains four main elements. They are:

  1. Stapling
  2. YourSuper
  3. Annual performance tests
  4. Accountability and transparency

For employers, stapling will have the biggest impact. You will need to add extra steps to your onboarding process for new employees to ensure that you are compliant.

Stapling
What is ‘stapling’?

Stapling is the process of linking super accounts to members. A stapled account will follow a member from job to job.

Your employees can still nominate their preferred super account using a Choice of fund form (like ours, available here). 

If they don’t make a choice, you will be required to contact the Australian Taxation Office (ATO) to ask for each employee’s stapled fund, and to pay contributions to it.

When did stapling commence?

Stapling came into effect on 1 November 2021. From this date, you need to take extra steps to determine the correct super fund for new employees.

Does stapling override choice of fund?

No, stapling doesn’t override choice of fund.

Much like stapling, choice of fund was introduced to minimise the creation of multiple accounts. Eligible employees will continue to have choice of fund, and this will take priority over stapling. In order to nominate a preferred fund, employees must complete a choice of fund form.

Employees can nominate any fund. You can provide information on your default fund, and the employee could choose that fund even if they don’t have a current account with the default fund. It is important that you do not compel employees to complete the form, or encourage them to choose your default fund.

Employees can choose to change funds at any time, and can advise you by giving you a new choice of fund form.

If an employee hands you a completed choice fund form, you must pay to their nominated fund.

Does stapling apply to staff who start a new job with an enterprise bargaining agreement (EBA) in place?

Yes. For employees starting on or after 1 November 2021, employers must check for a stapled fund before making super payments to a default fund or a fund stipulated in an EBA, regardless of whether or not the employee is eligible for choice of fund.

If the EBA was made before 1 January 2021, and it stipulates a fund, the employee does not need to be offered a choice of fund before checking for stapled fund details. If the EBA was made after 1 January 2021, the employee does need to be offered choice of fund.
 

What am I (the employer) obliged to do?

If your new employee does not nominate a fund using a choice of fund form, you will need to seek out the details of the employee’s stapled fund from the ATO. 

The ATO hosts a search tool, accessible through ATO online services. Once you have supplied the employee’s tax file number declaration or made an initial salary payment to establish an employment relationship, you will be able to enter the employee’s details into the tool to find the stapled account.

What if the employee has more than one super account?

The ATO will select the stapled fund by following a set of prioritisation guidelines. It will nominate a single super account.

How will the ATO prioritise funds?

When someone has more than one fund, the ATO will consider such ‘tiebreaker’ factors as the date of account creation, recency of contributions and account balance.

The ATO will nominate a single ‘stapled’ super account. You will not have to select a fund or prioritise.

How do I choose the correct super fund?

If the employee provides you with a completed Choice of fund form, you must pay to the chosen fund.

If the employee doesn’t provide you with a completed Choice of fund form, you must visit the ATO search tool to find a stapled fund for the employee.

If there’s no stapled fund for the member, you must pay to your default fund.

(Confused? It’s a lot to take in. This flow chart should help you out.)

What if an employee doesn’t have a super account?

If an employee doesn’t have a super account – perhaps this is their first job – and doesn’t nominate one with a Choice of fund form (like ours, available here), you must pay their super into your default fund. 

(Still choosing a default fund? Learn more about partnering with CareSuper here.)

Do I still need a default fund?

Yes, you still need a default fund. If a new employee starts on or after 1 November 2021, and neither nominates a fund nor has an existing fund, you will pay their contributions to your default fund.

What funds can be stapled?

A super fund must meet certain criteria in order to be stapled to a member.

  • It must be a complying fund.
  • The employee must be a member of the fund.
  • The fund must be able to accept contributions from the employer.
  • The ATO must be able to disclose information about the member or their fund to the employer.

A stapled fund does not have to be a MySuper fund; that is, it doesn’t have to be the low-cost, simple super solution employers choose as their default product. However, if you’re looking for a MySuper fund, the CareSuper MySuper option is our Balanced (MySuper) option.

YourSuper comparison tool
What is ‘YourSuper’?

YourSuper is an interactive online comparison tool that provides a table of simple super products ranked by fees and investment returns, with links to fund websites.

YourSuper is hosted by the ATO here: YourSuper comparison tool.

YourSuper:

  • Provides a table of simple super products (MySuper products) ranked by investment returns and fees
  • Links you to super fund websites where you can choose a MySuper product
  • Links to your myGov account to show your current super accounts and prompt you to consider consolidating accounts if you have more than one.
Annual performance tests
How will the annual performance tests be conducted?

The Australian Prudential Regulation Authority (APRA) will conduct the annual performance test and notify each fund by 1 September each year. They will advise:

  • The actual return versus the benchmark return on average (over seven years when 2021 results are available and over eight years thereafter)
  • Net investment performance after administration vs benchmark performance – median fees will be used.

That’s a lot of words – let’s break it down. The actual return is the return delivered by the fund. The benchmark is set by APRA. Each year, APRA will create an individual benchmark for every MySuper product, taking into account its asset allocation, fees, tax and other relevant assumptions.

The test will be set in line with regulations by the Government and administered by APRA. APRA will publish the results of the test. 

CareSuper is one of Australia’s leading super funds, with a track record of outperformance over the long term. You can see details of our investment performance on our Investment performance page.

What will the performance test apply to?

For the first year, the annual performance test will apply only to MySuper products (the low-cost, simple super solution employers choose as their default product). From 1 July 2022, more products will be included in the performance test.

We’ll include more information here as it becomes available.

What happens if a fund fails the test?

If a fund fails the test, APRA will advise the fund.

The fund will then have 28 days to advise its members, using the heading and subject line ‘Important notice about your super product’s performance’. The notice will advise the member how they can change to a super product that may perform better and will direct members to the YourSuper comparison tool.

The notice will also be published on the fund’s website.

It’s important to note that, unless the member takes action upon receiving such a letter, they will remain with that fund, and can be stapled to underperforming funds. If the member does not want to be stapled to, or remain a member of, an underperforming fund, they will need to take action to leave that fund.

If a fund fails the test for two consecutive years, it will not be able to accept new members into that option until they have again passed the test.

How did CareSuper perform in the 2020/21 performance test?

CareSuper passed the 2020/21 performance test.

Accountability
How will super funds be held accountable under Your Future, Your Super?

From 1 July 2021:

  • Super trustees are required to comply with a new duty to act in the best financial interests of members
  • Trustees will provide members with key information regarding how they manage and spend their money in advance of Annual Members’ Meetings.

CareSuper is an Industry SuperFund. We don’t have shareholders and don’t pay dividends. We operate the fund only to benefit members and act in their best financial interests.

What information must super funds provide to members in advance of Annual Members’ Meetings?

In a short-form summary (single page), funds must provide:

  • Total executive remuneration
  • Total payments for
    - Promotion
    - Marketing
    - Sponsorship
    - Political donations
    - Industrial body payments
    - Related party payments.

The above statement will also be published on the fund’s website. We will include a link to our statements here when our first one is live.

At CareSuper, we already publish much of this information, including financial statements and staff and board remuneration, in our annual reports. You can view our annual reports on our Forms & publications page.
 

Where can I find more information about YFYS?

We will continue to update this page as more information becomes available. In the meantime, you can read the government’s information on Your Future, Your Super here.

Got a question about Your Future, Your Super or stapling that wasn’t addressed here? Please contact our team or email us at [email protected]. We’ll get back to you with a response, and will continue to update our FAQs here.