Super Stapling – what is it?
19 April 2022

Hands up if you have heard of this term….

Anyone?

“Super Stapling” formed part of the 2020-21 Federal Budget and is part of the the “Your Super, Your Future” reforms. It has been designed to protect retirement savings accounts by effectively ‘stapling’ your super fund to you, so you don’t have a new fund created every time you start a new job if you haven’t nominated your own super fund with your new employer.

From 1 November 2021, all employers are now required to check with the ATO to ascertain what super fund or funds a new employee has before setting them up in a default employer fund. 

In theory, this should at least go some way to protecting retirement savings accounts and the insurance attached to the super account, however if individuals are not taking enough interest in their existing accounts, they run the real risk of losing insurance benefits that are attached to other accounts as the current rules state that if a balance falls below the threshold, or no contributions are received for 16 months, insurance will lapse if the member does not opt in to retain their insurance.

I have seen some heartbreaking stories in recent times of people who have lost super entitlements due to an employer not making contributions and the member not being aware of these consequences, or not fully understanding of the insurance policy. I have also acted for members whose default insurance amounts contained within their accounts are woefully inadequate after an illness or injury.

Stapling an employee to one fund will ensure that a member does not have several accounts therefore being charged several, unnecessary fees, however the proposal fails to recognise that most people only have a very basic understanding of super at all, and many people don’t even realise they have insurance within their super accounts.

So what should you do? 

Take some time to understand your super accounts, look at how they perform, look at what insurances you have and understand what the insurance covers. If you have more than one fund, consider if you are better off consolidating, which fund is better for you. 

When dealing with financial products such as Superannuation, if you don’t understand it as well as you would like, speak with your fund or your Financial Advisor.

If you are in a situation where you have not been able to work due to illness or injury, contact us to see if you are able to access your insurance. We’d love to speak with you.

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