From 1 July 2014, employers with 20 or more employees will begin using the Data and Payment Standard, also known as SuperStream, to make superannuation contributions to their employees.
From 1 July 2015 small employers, with 19 or fewer employees, will also begin to make contributions using the new standard.
The Data and Payment Standard is designed to improve the processing of everyday superannuation transactions. Businesses need to begin preparing as soon as possible and investigate the options available to them to meet the standard.
There are over 800,000 Australian employers who are required to make super guarantee contributions on behalf of their employees.
Some employers can find this a complex process because they often have to contribute to multiple superannuation funds, each with their own specifications for accepting the data and payments.
The Data and Payment Standard will streamline the process for many employers when making contributions. It provides a simpler, consistent method of preparing contributions. In most cases, it will provide a single channel for interacting with multiple super funds.
Employers will make super contributions electronically. The contribution data is sent electronically in message format to the fund and the contribution payment is sent electronically through the banking system. It will also reduce payment processing costs as the manual methods have been removed.
Super funds and their members will also benefit from processing contributions faster and improved data quality. The ultimate goal is to lead to better retirement outcomes for all Australians including:
• reduced administration costs
• higher lifetime savings
• fewer lost accounts
The data message and payment will be linked by a payment reference number which will enable reconciliation at the receiving fund.
Most of the key components required for this change, including e-commerce infrastructure and software solutions, are currently being developed, trialled and implemented.
Employers have options available to them for meeting this new standard. They can either use software that conforms to the standards, or a service provider who can meet the standard on their behalf.
Their options may also include:
• upgrading the businesses payroll software
• using an outsourced payroll or other service provider
• using a commercial clearing house.
Our accountants and super specialists are at hand to deal with any questions or queries regarding this article.
Call (02) 4926 2300 or email us.
To discuss the Data and Payment Standard in more detail, please feel free to contact Leenane Templeton and speak with our advisors.