Getting your SMSF clients SuperStream-ready
SMSF professionals need to ensure their trustee clients are well prepared for SuperStream and understand the changes being made to the way superannuation contributions are managed.
SuperStream introduces a new standard for all employers which involves making super contributions electronically with linked data and payments. The new system enables employers to use a single channel when making contributions, regardless of how many funds they are dealing with. Along with other changes, this simplifies the process and reduces costs by eliminating unnecessary variation and complexity.
The changes ensure SMSF member contributions get paid directly to their accounts in the timeliest manner possible. By receiving real-time remittance information trustees will be able to detect any errors or adjustments needed straight away.
Everybody appreciates the importance of tracking their super contributions today and making sure they are right. SMSF professionals are in a prime position to take a lead role with clients by helping to simplify the receipt and reconciliation of employer contributions to SMSFs.
Some medium to large employers began working with SuperStream from 1 July but all must have a firm implementation plan in place to ensure compliance before 30 June 2015. Small employers (19 or fewer employees) have until 1 July 2015 before SuperStream starts, and until 30 June 2016 to complete implementation.
With over 350,000 SMSFs in Australia receiving contributions, SMSF professionals should be advising their clients to check with their employer about when they are planning to send contributions using SuperStream. Your clients should have all their details organised at least 60 days before the planned start date.
Trustees need to set up an electronic service address - the destination for the contribution message - which can be obtained from a relevant service provider. This allows you to access this information via a login or email, depending on the service. Signing up to a service provider only takes a matter of minutes, is a once-off event and typically these services are available at low or no cost. The ATO has a register of service providers on its website.
Alternatively, most administration software packages will be able to receive SuperStream-compliant messages and integrate with incoming bank account data automatically for their clients. So trustees using accounting or administration services may find they have a simple way to get this done.
Depending on their role, professionals may be able to view contribution information from employers in the software and report it out or pass it on to clients in various forms, such as emails or online reports.
Where a professional is assisting the trustee to get ready, they will need to inform their clients of the details to provide their employer: their fund ABN, bank details and, importantly, the electronic service address – and they should do this prior to their employer’s implementation of SuperStream.
There is flexibility for employers who continue to pay contributions with existing processes until they fully implement SuperStream. The ATO is emphasising education and support for both employers and the SMSF industry during the introduction of SuperStream but will gradually shift its focus toward active compliance checks from mid-2015 onwards.
Checklist for SMSF professionals:
• Talk to your clients about their obligations and your role in the process
• Get an electronic service address from an SMSF messaging provider to receive contribution remittance information. Some SMSF providers offer a bulk registration process
• Provide the electronic service address to your clients
• Make sure your clients provide their SMSF details at least 60 days before their employer’s planned start date – ABN, an electronic service address (the destination for the contribution message) and bank details (account into which the payment is made)
The only exemption to the new SuperStream system is where an SMSF is a related party to the employer. A ‘related’ party employer relationship exists, for example, where a husband and wife (the only employees) are running their own business and superannuation guarantee contributions are paid to an SMSF of which they are a member.
Philip Hind, ATO data standards and e-commerce national program manager