A funny thing happened to us recently. We decided we would track the journey of the contribution and electronic service message from an employer to us (as a fund administration provider).
We knew what happened when it arrived with us, but was the process beforehand exactly as we thought?
We found an employer who was confident they were SuperStream ready. They had dutifully reminded their employees of the need to provide an electronic service address (ESA) some time ago (because as an employer with more than 20 staff, they had actually been subject to the SuperStream rules since 1 July 2014, although they knew they had a 12-month transition period).
They used an external payroll provider to manage the company’s payroll and were confident that the supplier was SuperStream ready – after all, our client’s finance staff had been busily entering ESAs into a new field on the payroll system for some time.
When we tried to view the electronic messages at Heffron, however, there were none available. Was it a problem at our end? Had we not registered the fund to receive messages at that ESA? No – all was fine on that score. In fact, the same fund was receiving electronic service messages from another employer contributing to the same fund.
We explored further and discovered that the company’s payroll provider in turn used a clearing house for superannuation contributions. Perhaps the problem lay there? No – the clearing house was listed on the ATO’s site as being SuperStream ready and also confirmed that was the case when we talked to them.
So where was the breakdown?
It was between the payroll provider and the clearing house.
To be 'really' SuperStream ready (as opposed to just 'kind of SuperStream ready') the payroll provider and clearing house had to complete a cross-certification process – essentially certification to ensure that the messages being passed from the payroll provider to the clearing house are SuperStream compliant so that the clearing house can just forward them on to the relevant fund’s electronic service address. The payroll provider had not completed that process.
The scary thing here was that our client’s employer had no idea this was the case. They had done everything they thought was required.
I wonder how many other employers think they are ready for SuperStream but in fact they’re not?
Meg Heffron, head of customer, Heffron SMSF Solutions