A new system will soon remove the complexities for business owners when they make employee superannuation contributions.
The new arrangement, being promoted by the ATO, will standardize the information that employers need to provide to funds and allow all data to be easily exchanged on a new accounting platform.
The new system, called SuperStream, will start operating from the new financial year. Employers will be able to reduce costs by using a standardized interface when dealing with a superfund, regardless of how many funds their employees contribute to.
The ATO’s National Program Manager, Philip Hind, told Dynamic Business that employers were still sending cheques and paperwork through to multiple funds in order to pay the contributions for their employees. The data requirements also vary from fund to fund, making life more complicated for business owners.
For small to medium sized business, an employer will usually have 20 or more funds they will have to contribute to. Larger businesses will often have to deal with 200 or 300 funds. In the APRA regulated system there are roughly 280 funds while there are another half a million in the self-managed sector.
“The first thing is, it (SuperStream) standardizes the contributions information that has to be provided by an employer,” Mr Hind said.
“An employer in adopting this new standard can operate in the knowledge that this will be accepted by whichever fund they send it to. You don’t have this variation caused by lots of different funds and their requirements.”
The new platform will allow employers to make their contributions through the BECS (Bulk Electronic Clearing System) payment method or via BPAY.
SuperStream arose out of the Cooper review into the superannuation system with Mr Hind labelling it one of the most “significant improvements to the compulsory superannuation system since its inception 20 years ago”.
“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 said.
Large and medium sized business with more than 20 employees must complete their implementation by June 30 2015. Smaller employers with 19 or less employees will be given an extra year before they need to start using SuperStream, with their implementation to be complete by June 30 2016.