Stronger Super was the 2007-2013 Federal government’s response to reforms arising from the Review into the governance, efficiency, structure and operation of Australia’s superannuation system (Super System Review). The latest reform; the SuperStream Data and Payment Standards will come into effect 1st July 2014.
While only impacting those employers with 20 or more employees, ClickSuper has developed a SuperStream launch ready program which will deliver:-
To access further information from the Australian Taxation Office please click on this link http://www.ato.gov.au/Super/SuperStream/
From July 1 2014, business with 20 or more employees will begin using the Data and Payment Standard when making superannuation contributions. Employers will need to make some changes in the way they currently make super contributions and will have many options available to them to meet the standard, these include engaging a:-
The Data Standards are complex and it is unlikely that any employer will make the necessary changes without the assistance of providers as listed above. For example a clearing house such as ClickSuper will shield a lot of this complexity and all that may be needed is the provision of some additional data fields, including tax file number (TFN) details of employees, where these have been quoted. However, provided your clearing house submits data and payments electronically on your behalf in accordance with the standard, you will not have to make any changes.
For those employers who wish to remit the monies themselves, the Payment Standard will apply and it must be sent electronically*:-
“2.1.1 Employers sending contributions
(a) Employers MUST send payments of contributions using one of the following methods:
(i) the Bulk Electronic Clearing System Direct Entry System (BECS DE) maintained
by the Australian Payment Clearing Association; or
(ii) BPAY maintained by BPAY Pty Ltd.”
In addition, each payment must have a unique reference*, as follows
“2.2 PAYMENT REFERENCE NUMBER
(a) Each payment MUST have a payment reference number that is included in the data
message that relates to the payment.
(b) In the case of a BECS payment, the payment reference number is an 18 character
identifier (that may be alphanumeric) generated using either the method in section
188.8.131.52 or the method in section 184.108.40.206.
(c) In the case of a BPAY payment, the payment reference number is the customer
reference number issued by, or on behalf of, the relevant superannuation entity.”
Further information can be found on the attached ATO Payment Methods* published by the ATO by clicking here.
In summary, affected employers need to determine how they will comply with the standards and who will assist them in compliance and finally once data compliant, how will they comply with the payment standard.
As a result of the SuperStream reforms, employers will need to consider utilising a service provider to assist them in meeting and ensuring ongoing compliance. Below is a comparison table to assist in the assessment of suitable service providers:-
Analysing the same providers; the table below is focused on workflow and back office efficiencies:-
Following our assessment of the various service provider types the focus is now on what is required to implement a SuperStream compliant system.
Other than ensuring the obvious, that they are compliant with the Data and Payment Standards confirmation is also required that if they are a clearing house they have the necessary licences to move money e.g. Australian Financial Services Licence no 337805 for ClickSuper.
Other requirements service providers must adhere to is to ensure 9 digit Fund SPINS fields can now cater for 14 digit Fund Unique Superannuation Identifier (USI) as they are transitioned from one to another. Lastly, the service provider will need to cater for a SMSF Electronic Service Address (ESA) for receipt of messages associated with employer contributions.
From an employer’s perspective after choosing their preferred service provider to enable SuperStream compliance their focus should be on the cleansing of employee Fund records to ensure a smooth transition as well as recording those ESA’s received from employees with SMSFs.
To ensure that contributions made in the new SuperStream environment reach their intended destination it is vitally important that employee records are updated to reflect the new Unique Superannuation Identifier (USI) regime.
The USI replaces the Superannuation Product Identification Number (SPIN) which had been used previously. The USI will uniquely identify a Superannuation Fund’s product, this, coupled with the member’s Tax File Number will ensure that funds are allocated correctly and promptly.
For Self-Managed Superannuation Funds, an Electronic Service Address (ESA) will be required.
The benefits of updating employee records now is so that in the future returns will be reduced. Note that should incorrect information be sent via SuperStream, funds will returned either electronically or in some cases via cheque if a clearing house is not used. For those with a clearing house, such as ClickSuper, returns may be handled, reconciled and notified as part of their clearing services.
With SuperStream fast approaching, a data strategy should be put in place to seek current and up-to-date USI and ESA information from employees to ensure returns are kept to a minimum. All employees should contact their relevant Superannuation Funds or Self-Managed Superannuation Fund Trustees to seek their relevant data.
It is anticipated that SuperStream contributions will start with limited trials 1 July 2014 on an invitation only basis. It is expected that by November most APRA Superannuation Funds will be ready to receive compliant contributions.
To enable employers to start utilising SuperStream, they will first need to contact their service provider or default fund to check when their SuperStream services have been certified to meet the relevant standards. The ATO will facilitate the accreditation process and publish the details of those service providers and Superannuation Funds which have been certified.
Once advised that your service provider or Superannuation Fund has been certified they should offer you the opportunity to conduct a SuperStream test run through.