4th November, 2021
As of 1 November, superannuation reform changes take place that sees super funds ‘stapled’ to employees.
The arrival of the Your Future, Your Super reforms mean employers will now need to pay into any new employee’s existing super fund, unless they nominate another.
Known as ‘super stapling’ the new rules are designed to cut down on the number of unnecessary super accounts that people were accruing, reducing the number of fees they pay overall.
Your Future, Your Super: Time to update your onboarding process
In a joint press release from Treasurer Josh Frydenberg and Financial Services Minister Jane Hume, the reforms aim to save Australian workers billions over 10 years.
“Every year around 850,000 duplicate [super] accounts are created. Treasury has estimated that stopping the creation of millions of unintended multiple accounts over the next decade will boost balances in super by about $2.8 billion by avoiding duplicate fees and lost returns,” the press release stated.
While the reforms have been on the way for some time, it’s unclear whether business operators have had sufficient time to be aware of, and prepare for, the switch.
As recently as June, CPA Australia and CAANZ made a joint submission that raised concerns about the legislation, including that consultation on the bill was offered on late notice and that it neglects to offer a grace period to business that would need to transition to new processes, among other things.
A recent MYOB survey of 520 small and medium business owners and operators indicated only one in three were confident they would be compliant on 1 November.
In fact, over half (53 percent) of the respondents were unaware of the Your Future, Your Super legislative reforms, while 60 percent said they currently use paper forms in employee onboarding processes as a means to collect Tax File Number (TFN) and superannuation details.
For those small and medium sized enterprises (SMEs) heavily reliant on paper-based onboarding, the MYOB survey indicates businesses expect to waste an average of 12.7 extra hours in compliance each month.
And, with three in 10 SMEs bringing on a new employee at least once a month, there’s all the more reason for business owners to make sure they’re handling this compliance work with care, says MYOB’s General Manager for Financial Services, Andrew Baines.
“Our data demonstrates 64 percent of small business owners will handle Your Future Your Super themselves and just 17 percent say they plan to appoint an accountant or bookkeeper, so it’s critical SMEs read up on their obligations.
“We know small business owners are resource and time poor,” said Baines. “However, if they don’t take the time to understand their obligations and put processes in place, they risk time wasted and possible penalties and costs of non-compliance.”
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For employers looking to get up to speed on the latest regarding your obligations and staying compliant, the first port of call is the government website.
The next step is to review your current employee onboarding experience to see whether the reforms are likely to have a business impact. For instance, organisations that aren’t already set up with digital onboarding, including super selection, will likely be facing higher costs.
To help address these challenges, MYOB includes digital onboarding for new employees in its products for both small and medium businesses, as well as larger organisations of 50-plus full-time employees.
Already an MYOB customer? You can set up digital onboarding for small and medium businesses with MYOB Team in just a few minutes. For bigger businesses, take a look at MYOB Advanced Workforce Management.