How does SuperStream affect your SMSF?
SuperStream is part of the Government’s Stronger Super initiative and introduces a more efficient method of sending superannuation payments and associated information in the superannuation system. Measures have been progressively coming into place since July 2014.
Small employers (19 or less employees) – and, importantly, the funds into which they contribute – need to be compliant with the standards by 30 June 2016.
So what does this mean for Self-managed Super Funds (SMSFs)?
Payment standards:
Payments will now have to be made to an SMSF electronically. Most employers will simply pay to SMSFs via Electronic Funds Transfer (ETF). APRA funds may set up a BPay facility.
Data standards:
Electronic contribution messages are to be sent to the SMSF’s “Electronic Service Address” (ESA). An ESA is simply an IP address or URL, which operates as an electronic mailbox for the contributions messages to be sent. It is not an email address.
Getting ready for electronic messaging:
To get ready, employers will need to:
- be able to send electronic messages, and
- collect relevant details (ABNs, banking details and ESAs) from the funds they contribute to
SMSF need to:
- establish an ESA (see below), and
- provide relevant details (ABN, banking details and ESA) to employers that contribute to the fund
Establishing an Electronic Service Address:
To comply with the SuperStream standards, every SMSF that receives employer contributions will need an ESA.
The standards do not apply to contributions made by ‘related party’ employers to an SMSF, and will not affect funds 100% in pension phase (as they are no longer receiving contributions!)
There are a number of providers of ESAs.
For the funds which we administer at Synectic we have chosen SMSF DataFlow as it fully integrates with our administration software Class Super and will allow us to automatically match contributions data with cash transactions and improve the efficiency of the service we provide.
What now?
SuperStream compliance is primarily a matter for employers. We’ve written more for employers here: Are you ready for SuperStream? and here: Free employer webinars from the ATO.
However, SMSFs do need to get their ESA and provide this to employers that contribute to the fund. Please contact us if you would like assistance.
