The new change to the way in which superannuation is handled for new to the workforce employees could dramatically affect their eventual retirement nest egg.
Over the course of their working life, an employee with multiple super accounts may have missed out on thousands of dollars due to fees or because they have ‘lost’ super in accounts long-forgotten.
This means that if you were charged, for example, $10 per month in fees for the super fund, and in the transition to a new job had a second super fund opened that also charged $10 per month in fees, you would be paying $20 in fees all up.
New employees to the workforce will not have to worry about this, as a stapled super fund will now be their constant companion throughout their working life. Introduced 1 November 2021, ‘stapled super funds’ are an existing super account that is linked (or stapled) to an individual employee so that it follows them as they switch jobs.
This move aims to reduce account fees and avoid the creation of multiple new super accounts.
So, if you started work in a position where you receive superannuation contributions from your employer at the age of 18, and changed jobs at 19 to another position that has super paid into it, your employers would have to pay those contributions into the same fund ‘stapled’ to you. This means you would only be paying fees for one super fund rather than multiple, and are at less risk of possessing multiple super accounts.
If you want to talk to us about your superannuation options, please book a free discover call here.