SMSF members planning to use their fund as a stapled fund under the Your Super Your Future changes may be better served selecting it under choice legislation if time frames do not allow the SMSF to be counted as a stapled fund.
Heffron head of SMSF technical and education services Lyn Formica said the stapled fund rules introduced in this year’s federal budget would start to apply from 1 November for new employees, including those who may have an SMSF they wish to use as their nominated fund.
Speaking during a technical webinar today, Formica noted, however, that time frames for the establishment of an SMSF or being added as a member to an existing fund may be too long for an employee to consider it as a stapled fund.
“If new employees don’t choose their own fund for their superannuation guarantee contributions, then rather the employer putting them into their default fund, the next step they have to undertake is to contact the ATO to work out what the employee’s stapled fund is,” she said.
“That will be the fund the person is already a member of and the employer will get that information from the ATO’s online services.
“It is quite possible an employee has an SMSF as a stapled fund, but there is a need to make sure there is sufficient lead time when choosing that fund.
“If they are establishing a new fund or becoming a member of an existing fund, the ATO will need the details to know that employee is a member of the SMSF when the employer makes the request for stapled fund details, otherwise it just won’t show up online.
“The quicker way to do it is to not rely on stapled fund rules, but existing choice of fund rules because the first cab off the rank is where someone picks a fund before the employer resorts to a stapled fund.
“In this case, an employee can use the normal choice of fund forms to nominate the SMSF as the chosen fund rather than relying on the stapled fund rules.”