The Australian Taxation Office (ATO) is encouraging employers to prepare for the introduction of SuperStream, which will change the way they make superannuation contributions in the future.
SuperStream introduces a new standard for all employers, which involves making super contributions electronically with linked data and payments. All super contributions are treated the same way – whether sent to a default or choice fund, an APRA fund or self-managed superannuation fund (SMSF).
Employers can opt-in to use SuperStream from as early as 1 July 2014, in cooperation with their service provider or default fund. The ATO expects most large and medium employers to implement SuperStream between July and December of this year.
Mr Philip Hind ATO’s National Program Manager, Data Standards & E-Commerce (SuperStream) explains that employers will benefit from a simplified experience and reduced costs by eliminating unnecessary variation and complexity that has crept into the system over recent years. The improvements mean regardless of how many funds their employees contribute to, employers can use a single channel when dealing with super funds.
According to Mr Hind, the need for reform of Australia’s superannuation system was highlighted in the 2010 Cooper Review, which found the existing processes made poor use of technology and there was no consistency in the data required and how funds dealt with contributions.
He describes SuperStream as one of the most significant improvements to the compulsory superannuation system since its inception 20 years ago. All employers need to introduce changes in the way they currently make super contributions; those who are already working electronically or have a clearing house partner will find these changes are relatively minor.
The ATO is focused on awareness raising, education and support for employers during the first few years of SuperStream as the new standard is adopted. All large and medium-sized employers need to prepare now to ensure they’re ready to transition to SuperStream at the earliest available opportunity.
Mr Hind adds the ATO will provide flexibility and support to employers making a genuine attempt to comply with their obligations under SuperStream, which means they must have in place firm implementation plans with their service provider or default fund including a proposed completion date. A large or medium employer must complete their implementation by no later than 30 June 2015.
Small employers (those with 19 or fewer employers) have another year before they commence using SuperStream, starting from 1 July 2015 but should complete their implementation no later than 30 June 2016.