What is SuperStream?
SuperStream is a new standard that requires all super contributions to be made electronically with linked data and payments. The changes will allow contributions to be treated in the same way – regardless if an employer sends them to a default or choice fund, including an SMSF.
SuperStream started to gain momentum by focusing on medium to large employers, or those with 20 or more employees, in the late 2014. These employers were required to have an implementation plan in palce and to ensure that they are SuperStream compliant by no later than 30 June 2015.
Smaller employers are also being encouraged to begin preparation for the SuperStream, which starts for them on 1 July 2015. Those that began earlier can already enjoy the benefits sooner.
Reducing costs and complexity
SuperStream’s benefit is that it reduces the cost and complexity that many employers face when they make super contributions. This means that they can use their payroll system to generate contributions as single event and send them through a single electronic channel.
The early signs of success from employers who already used SuperStream are visible and a few of them even noted how making a super contribution through SuperStream would now take them no longer than 10 minutes as opposed to the traditional method that usually takes about half a day. Other employers spoke about how using multiple formats was an inconvenience for their office because some were made through paper and some through electronic. But after they used the ATO’s Small Business Super Clearing House – a free service for employers with 19 or fewer employees, they were able to make contributions at once and at the same time, thereby meeting SuperStream requirements.
How to prepare
Contributions sent to an SMSF from a related-party employer are exempt from SuperStream and can be made using existing processes. For all the other SMSFs, you can get an electronic service address and provide this along with your SMSF’s ABN and back account details to your employer.
SMSF trustees need an electronic service address in order to receive contribution remittance information. You can get this from an SMSF messaging provider. The ATO has a register of service providers on their website. This is very easy to set-up and takes less than 5 minute to complete. Trustees can also find low-cost or free options available in the market. Don’t forget or don’t delay in providing your fund details so your employers can make changes in their payroll system. You need to wait for at least 60 days before your employer plans to start making SuperStream contributions.
On a broader note, businesses with 20 or more employees should have progress on their implementation plan. For those with 19 or less, they should try to talk to their bookkeeper, accountant payroll provider or major super fund and check what solutions they need to avail of so they can be SuperStream ready.
Employers should note employees who’re already members of an SMSF and they should be reminded to provide them with SuperStream information for their payroll records, including the SMSF’s electronic service address, ABN and bank account details.