Govt to drag super firms into electronic age
The government has broadly supported "SuperStream" recommendations to improve the processing of superannuation funds made by the Cooper Review.
The Cooper Review said that the current super administrative processes involved high costs because of manual processing of money transfers and data, which was often poor and incomplete.
It suggested that: the quality of data in the system as well as the way consolidation and contributions of funds be improved, tax file numbers be used as an identifier to help find lost funds, and the use of technology be increased to improve processing efficiency.
The government supported the "broad direction" of the recommendations, saying that it would early next year set up a SuperStream consultative sub-group, including employers and consumers, to consider the implementation of the recommendations and what datasets should be provided for superannuation contributions, rollovers between funds and benefit payments. The group would also design a process to follow when data is absent.
The Australian Taxation Office (ATO) will also have a role to play in implementing the recommendations.
The government said it would consider whether to mandate common data standards for electronic transactions after a transactional period. Standardised formats will aim to encourage the use of electronic transmission for data transfers.
The government will face costs to implement the tax file number as an identifier for super funds. It would also have to invest in updating systems and forms. To pay for these costs, it will impose a temporary industry levy on funds regulated by the Australian Prudential Regulatory Authority.
The tax file number (TFN) will become the primary identifier for member accounts from 1 July next year. Some of the restrictions around how a superannuation fund can use a TFN will be removed in order to enable the number's use to consolidate accounts.
The industry is expected to incur costs in its move to common data standards and electronic processing, but Ernst & Young has estimated that SuperStream recommendations could save the industry up to $1 billion per year.
Most of the recommendations are scheduled to be in place by 1 July 2015, but the government hoped to have common data standards and from that the electronic transmission of data by 1 July 2012.