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Superstream: What you need to know

Phillip Hind of the ATO explains how the government’s ongoing Superstream reforms will impact on employers.

Video transcript below:

Phillip Hind, National Programme Manager, ATO
Phillip Hind:
Superstream is a major government reform aimed at improving the efficiency of Australia’s superannuation system. Superstream applies to contributions which are sent under the SG – super guarantee obligation that employers have to superannuation funds and it also applies to rollovers between superannuation funds.

Reporter: The ATO’s new Superstream reform aims to streamline super contributions. So how does that aim to do this? Phillip Hind, National Programme Manager for Data and E-commerce explains more.

Phillip Hind: So Superstream introduces a simple consistent way in which contributions can be made by an employer. And increasingly we are going to find that funds are providing a single channel through which contributions can be made. Ever since choice of fund was introduced 7 or 8 years ago, the superannuation system has become more complex for employers. Each employer has many different funds they need to contribute to, each fund has many different ways in which they want contribution sent to them. What Superstream does is standardise that. It makes it compulsory to send using an agreed set of business terms, an agreed electronic format and therefore it takes a lot of this complexity out of the way and makes it simpler for employers.

Reporter: Hind says there are many steps HR managers can take to prepare for the instigation of super stream.

Phillip Hind: The most important thing is to talk to your service provider that you might currently be working with, whether that’s a Payroll solution provider or Clearing House or even potentially your major default fund that you work with. You should look at what options you’ve got because your current arrangements may not necessarily be the best for going forward. So certainly approach this with an open mind about what’s going to give you the best and most efficient long term solution. You might have multiple payroll solutions and so this is one of the factors that you would take into account in thinking about integrating some of your payroll and back office systems in the longer term even if you don’t do it in the short term. 

There are also some key steps you should take in looking at what data you are currently collecting for contributions and what additional data you might need to make the Superstream standard. For example, tax file numbers now are mandated where an employee has provided them to be included in contributions. So you need to make sure that that information is being retained in your payroll system and your companies any contributions. In addition because the standard involves electronic information and payments, there is a payment reference number which now must always be attached to a contribution so that the money and the information can always be reconciled by whichever fund is receiving it.

Reporter: Finally Hind reminds HR managers to be mindful of the key implementation dates.

Phillip Hind: Legislative change becomes effective from the 1st of July, 2014 for large and medium employers, that is an employer that has more than 20 employees on their payroll. Small employers have another year until the 1st of July, 2015 before they are required to use this new Superstream standard. Now although the legislative start date is the 1st of July, in practice the real date that people need to focus on for their getting their implementation ready is 3rd of November, 2014. That is the date in which APRA funds will be ready to receive and when it’s expected that employers will start implementing.