Get ready for Superstream
- SuperStream is a new data standard for superannuation transactions
- Employers with 20 or more employees to adopt SuperStream for contributions to super funds by 30 June
- Smaller employers will start transitioning over from 1 July
If you haven’t already, you’ll soon need to have your SMSF ready to receive payments using the new SuperStream data standards. In this article, we’ll take a look at what’s involved. But let’s first answer the question: what is SuperStream?
SuperStream requires employers and super funds (including SMSFs) to use new data and e-commerce standards for all superannuation transactions. It’s designed to speed up the transfer of data and remove inefficiencies in back office processing.
Cheques and paper-based forms are still in widespread use, resulting in mis-allocations to member accounts, processing delays and duplicate or lost contributions.
The government expects SuperStream to speed up the time it takes for contributions to be credited against a member’s account (from weeks to just days); provide better notice to members about contributions received (or not); and reduce mistakes in crediting funds to members.
SuperStream is mandatory for all employers making super contributions and is being imposed in two stages.
Firstly, by no later than 30 June 2015, medium and large employers – those with 20 or more employees – must start using SuperStream to send contribution data and payments electronically. Super funds must receive contributions from these employers in accordance with SuperStream.
If you’re an employee of a medium or large employer and have an SMSF, you’ll need to ensure your fund is ready to start using SuperStream as soon as your employer is ready to go (if you haven’t already). We’ll explain how you do this in more detail below.
The only exception is where the employer and fund are related parties. So small business owners paying contributions to their own SMSF are off the hook (although they can opt to use the standard if they wish).
In the second stage, starting 1 July 2015, small employers (those with 19 or fewer employees) will come into the fold, with the same exception. They’ll have until 30 June 2016, at the latest, to start using SuperStream.
If you’re an employee of a small employer and operate an SMSF, you should check with your employer when they intend to start using SuperStream.
What does SuperStream require of SMSF trustees?
Once your employer starts using SuperStream, you’ll need to give them your SMSF’s details by the end of the quarter in which they start (speak to your employer regarding timing, but for employees of medium and large employers it should be the end of September at the latest).
Super fund information is typically provided using the Standard Choice Form (NAT 13080) available from the Tax Office. You’ll need to provide your employer with an electronic service address (ESA) for the delivery of contribution messages, in addition to other fund details. To obtain an ESA, you’ll need to first register with a messaging solution provider.
Messaging solution providers
Many companies involved in SMSF administration and banking are offering messaging services for SuperStream.
The Tax Office maintains an updated register of providers on their website and highlights those that are open to all SMSF trustees and those that only serve their existing clients. You can access the register here.
If you use an online administrator, check with them first. Even if their name doesn’t appear in the register they may be using software provided by the likes of Class Super. Assuming the administrator provides the service free of charge (or cheaply) then it makes sense to use them as it’s likely to mean more efficient processing.
BGL, for instance, has highlighted to users that signing up with another provider (they’ve partnered with Australia Post) will mean data doesn’t get automatically uploaded to their system.
If you don’t use an administrator, then using your bank is likely to be the next best choice, but speak to your accountant first. A key benefit of SuperStream is data matching, so you should register with the service provider that’s going to make your administration as simple as possible.
Failing that, there are paid services, including the one offered by Australia Post (which starts at $50 a year). There are also a number of free services, such as SMSF DataFlow (offered by Class Super) but they’re likely to be accompanied by marketing emails.
What if I don’t receive contributions?
If your SMSF is no longer receiving contributions – in pension mode for example – then there’s no need to get an ESA. SMSFs are also excluded from the requirement that rollovers between funds be done under SuperStream standards.
Remember, once your employer starts using SuperStream you’ll need to give them your ESA, ABN and banking details. There’s not a lot involved to register, so don’t leave it until it’s too late.
Liam Shorte is a principal of Verante Financial Planning Pty Ltd (www.verante.com.au), a corporate authorised representative of Magnitude Group Pty Ltd (AFSL 221557). This article is a general information article and to the extent it contains any financial advice it is general advice only. We recommend seeking personal advice on your own circumstances.
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