Changes to super kick in next month: Here’s what SMEs need to know

Superannuation

Small businesses onboarding staff will be required to figure out whether new recruits have an existing super account, under new government rules coming into effect next month.

The changes to super legislation will establish so-called staple super funds that are designed to stop Australian workers from opening multiple super accounts when they change jobs.

From November 1, employers will be required, in some situations, to check whether a new staff member already has a super account by contacting the Australian Taxation Office (ATO).

Under the changes, business owners will continue using the standard super choice form, giving staff the option to choose an existing super fund or the employer’s default fund.

The staple super fund requirement kicks in when the employee doesn’t choose a super fund.

If a new employee doesn’t select a fund, employers will have to ask the ATO for their existing super account details. Previously, employers could nominate a default fund on behalf of their staff.

Despite the changes affecting all Australian businesses, many SMEs are unaware of these additional requirements.

Steve Price, head of go-to-market at the accounting platform MYOB, says he expects the new requirement will catch many small business owners off guard.

“The legislation is going to help employees, in particular, but it does create an administrative burden for small businesses,” Price tells SmartCompany.

According to a MYOB survey of 520 SMEs, 53% of business owners are unfamiliar with the new staple super fund rules.

The sectors with the lowest awareness of the reforms are manufacturing and wholesale at 59% and retail and hospitality at 57%.

The release of the survey findings comes as MYOB partners with Sydney-based fintech Flare to help businesses streamline super compliance requirements.

The partnership, which was announced late last year, will allow MYOB to offer its small businesses customers access to Flare’s super selection platform which fully integrates with payroll.

“[The partnership] aligns with what we’re trying to do at MYOB in terms of integrating partners into our platform to help businesses in a broader way than traditional accounting,” Price says.

Founded in 2015 by Dan Cohen and James Windon, Flare is a cloud-based platform that allows employers to manage HR processes including employee onboarding, payroll, benefits and superannuation.

Speaking to SmartCompany, Flare’s head of strategy Harry Godber noted that the super management tool was designed to help more employees select their own super fund.

“The fact that about 80% of Australians end up failing to make a choice means the more that we can do to help businesses support their employees to make a conscious choice of fund, the better it will be for their retirement outcomes,” Godber says.

Businesses will be able to retrieve the details of a new employee’s existing super account through the ATO’s online services.

The tax office has also set up a bulk request option, allowing businesses to obtain the stapled super fund details of more than 100 new employees at a time.

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