iscover Modelling highlights 'significant implementation risk' with stapled super changes
BusinessA bill designed to streamline the choice of fund process for new employees could result in over 300,000 duplicate super accounts being created every year, Employment Hero has warned.
Employment Hero has raised major concerns about the Supporting Choice in Superannuation and Other Measures) Bill 2025 currently before parliament, after undertaking modelling on the changes.
Amendments to the bill allow greater flexibility for employers or their agents to request an employee's existing stapled fund details from the ATO earlier in the onboarding process. This enables the employer to provide those details to the employee during onboarding to help inform their choice of fund.
The bill also introduces a general prohibition on superannuation product advertising during employee onboarding, with the exception of an employee’s stapled fund, the employer’s default fund or a MySuper product that meets the relevant criteria.
Employment Hero general manager of payments, superannuation and benefits, Rob Dunn, said the bill requires digital platforms to display an employee’s stapled fund before showing any other information.
"While this sounds reasonable in theory, current ATO processes and data gaps mean this lookup is estimated to fail for 55 per cent to 80 per cent of digital onboards," Dunn said.
"If the law proceeds as drafted, up to 1.9 million workers annually will face a superannuation 'blackout', seeing zero information about their existing funds if the ATO lookup fails.
Dunn said this means that instead of seeing a verified existing fund they already hold, they will be funnelled into an employer default account.
"This current architecture risks creating over 300,000 new duplicate accounts every year, which is the exact problem this Bill seeks to solve," he said.
The bill was referred to the Senate Economics Legislation Committee for review in early February. The committee released its report last week, recommending that the bill be passed without amendment.
With the committee backing the 1 July deadline, Dunn said the implementation cliff is mere months away and coincides with the commencement of Payday Super laws.
"For employers, this represents a significant additional administrative burden at a time when many are already navigating complex compliance changes," he said.
In its submission to the Senate Committee, Employment Hero recommended that Schedule 2 be amended to support the presentation of ‘best available information’ to employees in the onboarding process, where the employee’s stapled fund is not successfully retrieved in the onboarding window.
Dunn said this would allow digital service providers to show a worker's verified existing fund so their super stays where they want it.
"Showing an employee a fund they already hold is not advertising; it is a factual fallback when ATO systems cannot return a result. Let’s ensure the technology works before we lock it into law."
Miranda Brownlee
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.
