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Get yourself prepared for Super Stream

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If you are an employer or a trustee of one of the 800,000 Self-Managed Superannuation Funds in Australia, then this Article is for you. The Australian Tax Office and the Federal Government have been encouraging all the Employers, APRA Regulated Super Funds and Self-Managed Superannuation Funds to implement the new Super Stream technology at the earliest.

What is Super Stream?

Super Stream is a government reform aimed at improving the efficiency of the superannuation system. Under Super Stream, employers must make super contributions on behalf of their employees by submitting data and payments electronically in a consistent and simplified manner.

Who does Super Stream apply to?

From the specified date Super Stream would be mandatory for all employers making super contributions, APRA-regulated super funds, and Self-Managed Super Funds receiving contributions.

Why is Super Stream being introduced?

As per the ATO, the main purpose of Super Stream is to ensure employer contributions are paid in a consistent, timely and efficient manner to a member’s account. The change also removes many of the complexities employers currently face as a result of funds being able to set up different arrangements for accepting contributions (due to the lack of common standard).

So what is my responsibility in Super Stream?

  • If you’re an employer, you need to ensure that all your employers who have opted for their superannuation guarantee contributions be deposited in a Self-Managed Super Fund have arranged with an approved Super Stream provider and have provided you the necessary details in order for you to transmit their contribution electronically to their respective super fund account
  • If you’re a trustee of a Self-Managed Super Fund, then you need to ensure that, you’ve setup a facility with an approved Super Stream provider and you’ve provided necessary details to your employer. Otherwise, your contributions run the risk of not being deposited at all after your employer has implemented the Super Stream for other employees.

When do I have to start using Super Stream?

20 or more employees: If you’re an employer with 20 or more employees (medium to large employer) Super Stream started from 1 July 2014. From that date, employers needed to start implementing Super Stream and have until 30 June 2015 to meet the Super Stream requirements when sending superannuation contributions on behalf of employees.

ATO are facilitating the implementation of Super Stream for employer contributions by coordinating the introduction of compliant Super Stream solutions. As an employer you need to work with your service provider to decide when it is best to make the change.

19 or fewer employees: If you have 19 or fewer employees (small employer), Super Stream starts from 1 July 2015. You have until 30 June 2016 to meet the Super Stream requirements when sending superannuation contributions on behalf of your employees.

Note: You can voluntarily adopt Super Stream from 1 July 2014 if you are ready; many solution providers may offer to assist you to do this from this date.

How will Super Stream benefit employers?

These changes have a range of potential benefits for employers, including:

  • The opportunity to use a single channel when dealing with super funds, regardless of how many funds your employees contribute to
  • Less time spent dealing with employee data issues and fund queries
  • Greater automation and reduced cost of processing contributions and payments
  • More timely flow of information and money in meeting your superannuation obligations

How will Super Stream benefit employees?

As per the ATO, the introduction of Super Stream will lead to better retirement outcomes for all Australians, including:

  • Reduced administration costs for members
  • Higher lifetime savings
  • Fewer lost accounts.

What employer processes are covered by Super Stream?

Super Stream prescribes how you send the following for contributions processes:

  • Contributions for your employees to each super fund, irrespective of whether the fund is an accumulation or defined benefit scheme and whether the fund is default or choice
  • Choice contributions made to SMSFs (except for closely held related parties)
  • Initial member registration details for default funds
  • Updating and maintaining employee details over time with all funds (whether default or choice).

What are the main components of Super Stream?

The four key elements are:

  • A common set of business terms and definitions which are used to describe each element of employee contributions
  • A common data format for reporting the contributions details for your employees
  • A standard message structure for sending and receiving messages from your funds, and
  • Standard payment methods.

Most employers do not need to understand the technical detail of Super Stream – the data requirements will be sourced from a complying payroll system or other system provided by your service partner.

If you’re an employer, your payroll officer/staff will need to become familiar with the data and processing requirements of Super Stream.

If you’re a small business owner and managing a few employees in your company, you may contact your Accountant or Tax Agent to provide you necessary details.

Based on the content from the ATO website. The author can be reached at shan@finadviser.com.au for more details.

By – Shantanu Sarkar

Tune India Radio Sydney Australia