Superannuation funds should not wait for the SuperStream reform to be written into law before changing their antiquated administration systems. SIMON MUMME reports. Philip Hind, national program manager of SuperStream, shared an optimistic view of the future of superannuation administration last month. “In the future we’ll see more standard rollover and contributions processing across the industry, more straightthrough processing and data quality,” Hind said. “Electronic funds transfers will become the norm for submitting contributions. Hind, who is also chief knowledge officer at the Australian Tax Office, spoke at the AIST Superannuation Administration Symposium in Melbourne last month. He also foresaw more tax file numbers being linked to accounts. “We’ll also see more interaction with members online,” he said. Standard methods for processing contributions and data integrity checks, which are key initiatives under the SuperStream reform, would eventually see administrators receive clean member data from employers. This could be achieved if administrators agreed or were forced to use common processing standards and not maintain different processes in order to keep their market share, Hind said.
Administrators should also aim to become “partners” with employers. Funds should provide a single administrative interface “to make it as simple as possible” for employers to submit member data and contributions. He flagged likely starting dates for the various initiatives. Data standards could be introduced as soon as December and legislation next year. Account rollovers could become mandatory in 2013 and large- and medium-sized employers begin using new contributions processing methods in mid-2014. They will be followed by small businesses. “None of this will happen without you being involved in driving some of these initiatives,” he told the administrators in the room. Through an audience poll, delegates were asked how much mandatory data and e-commerce standards would impact funds. The majority – 48 per cent – said it was a big change; 40 per cent said it was ambitious but manageable; 10 per cent said the impact would be negligible; and 2 per cent were undecided. Hans van Daatselaar, manager of strategy and policy at Superpartners remarked that efforts to introduce the swimEC data standards to superannuation in recent years had failed.
Jason Gracanin, manager of product development at Pillar Administration, said the momentum to enforce standards now was stronger because it would be part of an overhaul funds’ administration processes. “This is a package. This time we have strong leadership and a lot of people are prepared to kill sacred cows,” Gracanin said. The counsel from Matthew Halpin, chief officer of member administration at QSuper, was not to wait for legislation to be signed before adapting to the proposed reform. “Draft standards on contributions and rollovers are there. We’re looking at them to see how they impact our systems and processes,” Halpin said. QSuper was also considering how to initiate auto-consolidation of the accounts held by inactive members, he said. Josef Pilger, executive director of financial services at Ernst & Young, said a groundswell of support from administrators was essential. “Putting data standards out there is one thing. Making sure that people understand them and see the advantage is another,” he said. He advised administrators to start scenario planning. “Identify which major areas you will be able to cope with and those you won’t. Ask tough questions.