Onboarding legislation introduced: Stronger safeguards will help stop duplicate super accounts 

Super Consumers Australia welcomes the Government’s action in introducing legislation to reform the super onboarding process after Payday Super passed Parliament.

“We’re pleased to see the Government move quickly to finish what it started. Acting now on onboarding shows a commitment to reducing the real financial harm caused by duplicate super accounts,” said Xavier O’Halloran, CEO of Super Consumers Australia.

“This legislation is a significant win for consumers. It will ensure new employees are shown their existing stapled fund alongside any non-default advertised funds, reducing the risk of people ending up with accounts they didn’t want or need.”

Under the new bill:

• Super fund advertisements during onboarding will only be permitted if the employer has first done a stapling request with the ATO to find the employee’s current super fund, and presents their current fund alongside any ads.
  
• This is a stronger protection than the consultation draft, which had proposed a limited advertising ban without this requirement.

“It’s a smart move that aligns the commercial incentive to advertise with a real obligation to show people their existing fund first. That will go a long way toward preventing duplicate accounts,” Mr O’Halloran said.

While welcoming the improvements, Super Consumers Australia reiterated the need for mandatory stapling checks in all onboarding processes, not just those where advertising is included.

“This is a stronger outcome than we expected from the draft, and it’s clear the Government has listened. But we still see value in making stapling checks universal, not dependent on whether an onboarding platform wants to show ads,” Mr O’Halloran said.

“Every new worker should be told upfront if they already have a fund. That’s basic transparency, and it should apply to everyone.”

There are still around 4 million people with more than one super account and these duplicate super accounts continue to cost Australians hundreds of millions each year in unnecessary fees and insurance premiums. 

“This legislation is a step in the right direction and it shows that better consumer outcomes are possible when government policy resists commercial pressure,” Mr O’Halloran said.

There remains work to be done. Fundamentally, people would be better served by independent comparisons rather than advertisements when making life changing decisions, like the choice of a super fund. 

Should the legislation pass into law as drafted, there will need to be strong regulations supporting the new law to ensure that stapled fund information is clearly displayed and advertised funds are not displayed in a way that encourages a person to create a duplicate account. We also call on ASIC to closely monitor employee onboarding software providers to ensure no unfair trading practices are tricking people into opening a duplicate super account.