SMSFs - important information regarding your employer superannuation contributions

SMSFs - Important information regarding your employer superannuation contributions

The Australian Taxation Office has recently implemented changes to the way employer superannuation contributions can be made, and these changes will affect you as a Self Managed Superannuation Fund (SMSF) trustee/director. These changes are known as SuperStream.

What is SuperStream?

SuperStream is a government reform aimed at improving the efficiency of the superannuation system. Under the new SuperStream system of processing contributions and rollovers, employers will make superannuation contributions on behalf of their employees by submitting data and payments electronically, in accordance with the SuperStream standard.

Superannuation funds, including SMSF's, must be able to provide the relevant information to members and be ready to receive contributions and data in the new electronic standard from the relevant start date.

Contributions made to an SMSF from a related party employer are exempt from SuperStream. These contributions can therefore continue to be made using existing processes. While the payment and data standards are not compulsory for related party contributions, they can be used if preferred.

Where a fund receives contributions from an arm's length employer though, the changes will be compulsory and the fund will be required to put processes in place to deal with the changes.

If the SMSF receives contributions from an employer with 20 or more employees, the employer will need to comply with the changes by 31 May 2014, ready for a 1 July 2014 start date.

If the SMSF receives contributions from an employer fewer than 20 employees, the employer will need to comply with the changes by 1 July 2015.

In addition to ensuring your SMSF is ready for the changes when they are introduced, it is also important to ensure any employers who contribute to your SMSF have provided you with all necessary information, before the changes take effect.

Employees are required to provide relevant information to their employers. Affected SMSF's must be able to provide these members with the following information by 31 May 2014 or 1 July 2015:

Superannuation Fund name
Superannuation Fund ABN
The BGL Electronic Service Address (ESA): AUSPOSTSMSF
The Superannuation Fund's Bank BSB and Account Number

How do I let the member/employee know about the Fund's e-commerce details?

You can do this by providing these details in writing, emailing or otherwise updating the Fund details with the member, who will then forward this information to their employer. Once the employer has these details, they have all the information they require to be able to electronically report to the SMSF and also to make contribution payments.

We are working with our SMSF software provider, BGL Corporate Solutions Pty Ltd, to ensure your fund complies with the requirements of SuperStream.

If you would like us to attend to establishment of your Electronic Service Address with Australia Post, and register for SuperStream with BGL Corporate Solutions Pty Ltd on your behalf, our standard fee is $250 per fund. By registering via BGL Corporate Solutions Pty Ltd there will be no annual fee charged by Australia Post. Should you choose to establish the required address yourself with Australia Post the annual fee will be $25 per annum. Should you choose another SuperStream Gateway, the annual fee may vary, and employer contributions for your fund will not be able to be uploaded into your SMSF software. As the release date for BGL is potentially 31 May 2014, we will be setting up all SMSF clients during the month of June 2014.

Should you require any further information on SuperStream, please do not hesitate to contact us.