- Published on 09 Jun 2016
- - Self Managed Superannuation
SuperStream is a package of reforms designed to make the superannuation system easier to use for members, employers and funds.
These reforms will provide significant cost reductions across the industry. Subsequently benefitting members of fund, employers and the funds themselves.
A recent Ernst and Young report estimated $1 billion per annum in savings for the superannuation industry from SuperStream.
How members benefit from SuperStream
The current superannuation system can be difficult to understand making it hard for individuals to track their accounts and move or consolidate their superannuation benefits. There is no facility allowing a member to view all of their superannuation arrangements in one place.
Because Superannuation funds do not conform to a single policy re the transfer and or consolidation of Superannuation, it is the member who pays a higher cost in the end.
The following is a summary of the benefits that SuperStream will bring
- Through a single log in, members will be able to track all of their Superannuation entitlements
- Consolidation of superannuation arrangements can be initiated by member.
- A simplified set of standardised procedures will make the movement of Superannuation easier to manage for the member
- For small accounts of less than $1,000, these will be automatically consolidated into another members account. Members are able to opt out of this if they need to for any reason. Reasons could include wishing to retain current Personal Insurance arrangements etc.
- All transactions should be processed more quickly and efficiently. Transactions include contributions in all their various forms (Concessional Contributions, Non-Concessional Contributions, Spouse Contributions and Co Contributions etc.) and roll overs or consolidations from other superannuation arrangements in the members name.
- Members should be able to more easily check to ensure that their employer is making Superannuation contributions on their behalf.
The existing Superannuation system can be difficult for employers to use. Particularly where employees have Superannuation choice and each fund has a different methodology. This should be a simple task. SuperStream aims to;
- Employers will benefit from a simplified common set of requirements when making contributions to multiple funds.
- Electronic payment of Superannuation contributions will also be standardised.
for Superannuation funds
The industry has attempted to design and implement a standardised set of procedures. There has been a lack of agreement between all parties. The inefficiencies as a result are obvious leading to significant complexity and confusion.
- Simplified administration processes when dealing with employers through common data standards and processing requirements
- Significant cost reductions are expected in the ongoing administration of members contributions and funds. Expected savings of more than $1 Billion annually once Super Stream has rolled out.
- Tax file numbers will also greatly assist funds in the more efficient tracking and consolidation of member accounts
Finally, a Super Stream council will be established and made up of representatives from the Superannuation industry, employers and members. This council will provide a forum for the entire industry to report to the Government on how implementation is going as well as suggest better ways to manage and assist all concerned.
To implement all of this, the Government has proposed a levy to cover the costs of roll out. It is anticipated that the costs of the roll out will amount to $467,000,000
The Commonwealth Government are seeking to recover the costs associated with the implementation of these reforms by imposing a levy on all APRA regulated Superannuation funds.
Most Superannuation funds are APRA regulated and as a consequence, your Superannuation account will pay a small levy as part of everyone contributing to the costs of these reforms.
When originally estimated, the anticipated costs of the reforms were estimated at $467 million dollars. It is anticipated that these costs will be recovered over the next 6 financial years.
The anticipated recovery of these costs is outlined in the table below.
|Year||Total Cost (Estimated)|
It is anticipated that all members of Superannuation arrangements affected by this levy will contribute a pro rata amount based on the value of their Superannuation accounts.
Where this tax is recovered on a pro rata basis, the following table shows the approximate amount that members will contribute to the cost of these reforms.
|Account Balance ($)||Approximate SuperStream levy ($)|
Your Superannuation fund will communicate the levy amounts clearly with you and the levy cost will be clearly identified on your next statement post the debit of this amount.
Treasury have released a fact sheet that can be viewed by clicking here…
If you would like to discuss this with us, please feel free to either email or call us on 03 9596 7733.