Stronger Super - SuperStream. VicSuper Pty Ltd ABN AFSL RSE L is the Trustee of VicSuper Fund R

Transcription

1 Stronger Super - SuperStream VicSuper Pty Ltd ABN AFSL RSE L is the Trustee of VicSuper Fund R

2 Outline 1. Stronger Super 2. Employer obligations 3. The VicSuper solution

3 Part 1: Stronger Super

4 Stronger Super - A raft of changes 5 key areas: 1. TFN - Allowing increased use of a member s TFN 2. Rollovers The electronic initiation, transfer and payment of rollovers between APRA regulated superfunds (SMSF s to be included later) 3. Reporting - Increased superfund reporting to the ATO on all member account details 4. Employer contributions Requiring all employers to submit data online and send payments for employer contributions electronically Due to go live 1/7/2014 and 1/7/ Auto consolidation - of member accounts across superfunds for members with balances initially below $1,000 and then $10,000 to reduce the number of accounts. - Intrafund proceeding Interfund will not proceed.

5 Gateway and Network Participant Roles (Source ATO) Schematic view Employer 5 Employer 6 Employer 7 Employer 8 Employer side connections Payroll Bureaux Service Hub In house Payroll Employer 1 Employer 2 Employer 3 Employer 4 5 Operator F Intra gateway network Operator A Gateway Operator B Self administered Funds Fund 1 Fund 2 Fund 3 Administrator A Administrator Fund side connections Fund 4 Fund 5 Fund 6 Employer 9 Employer 10 Employer 11 Employer 12 Small Business CH Service Hub Gateway Gateway Administrator B Administrator Fund 7 Fund 8 Fund 9 Employer 13 Employer 14 Employer 15 Employer 16 Clearing House Service Hub Gateway Operator E Gateway Operator C Administrator C Administrator SMSF 1 SMSF 2 SMSF 3 Employer 17 Employer 18 Employer 19 Employer 20 Other Service Agent Service Hub Gateway Operator D Other Service Agent Service Hub SMSF 4 SMSF 6 SMSF 5 The ATO has left it to the Gateway providers to self regulate this space

6 Part 2: Employer obligations

7 Implementation date Employer obligations Large employers 20+ employees Start from 1 July 2014 Penalty grace period ends 30 June 2017 (Subject to legislation) Small employers <20 employees Proposed to start from 1 July 2015

8 Employer obligations (Cont) Data Mandatory data standards apply Data must be validated upon submission Invalid data will not be accepted into the system Defined Benefit fund data is included Payments Data must be sent the same day that payments are made Electronic payments only Negative payments cannot be accepted

9 Employer Options (1) single gateway routing to destination funds Scenario 1: Employer sends contribution message envelope to Gateway A which splits and repackages the message in two envelopes one for each target fund. Gateway A sends first message envelope to Default Fund 1 (or their administrator) for processing and reconciliation with money flow. Gateway A does the same with the second message envelope to the Choice Fund (as this fund happens to have the same gateway partner). 1 2 Employer XBRL payload/ ebms message Data Validation upon submission One Default payment Gateway A XBRL payload/ ebms message XBRL payload/ ebms message 1 2 Fund Default Fund (or their administrator) Choice Fund (or their administrator) Many Choice Payments NB: Employer routing of message via Gateway A is determined by the Default s fund selection of a nominated gateway partner Error/status messages always flow on reverse pathway Money flows separately via the banking system (electronic payments) and is reconciled via a unique transaction reference number Technical notes: message is always in XBRL format and wrapped in ebms defined SOAP envelope. Payload (SOAP body) is never opened or interrogated by the gateway as routing details are in the SOAP header. How content and formats are handled between administrator and fund are outside the scope of the standard. Source: Australian Taxation Office

10 Employer Options (2) clearing house as employer agent via gateways Scenario 2: Employer sends data files and money to Clearing House for transformation to standard message format. CH sends contribution message envelope to Gateway A which splits and re packages the message in two envelopes one for each target fund. Gateway A sends first message envelope to Default Fund (or their administrator) for processing and reconciliation with money flow. Gateway A sends the second message envelope to the Choice Fund via Gateway B (which assumes responsibility for delivery). One Payment Data or Files Employer 1 XBRL payload/ Any format ebms message 2 Clearing House (Agent of employer) XBRL payload/ ebms message Gateway A 2 XBRL payload/ ebms message XBRL payload/ ebms message 1 2 Default Fund Choice Fund Gateway B NB: Employer routing of message via Gateway A is determined by the Default s fund selection of a nominated gateway partner Error/status messages always flow on reverse pathway Money is handled by Clearing House on behalf of employer. It flows separately via the banking system (electronic payments) and is reconciled via a unique transaction reference number Source : Australian Taxation office

11 Employer User Roles The ATO expects employers to have adopted a role. This will be critical in relation to error messaging. Large employers will be an advanced user role. All employer will have an Ultra light profile up to 31/12/2014 due to implementation delays. Advanced Level User Role Maps to High-end and Large-volume conformance profiles set out in schedule 5 of the Standard. Designed to be used by larger employers and/or those with significant IT and message handling capability that choose to send messages using their own IT resources. Typically, an employer in this role will have a fixed IP address and an always on message receiving capability. The employer would send new member registrations and contributions messages using a payroll software system or a custom-built application. s may be pushed from the employer s IT system over the internet to fund via a gateway. Error messages may be pushed by the fund back to the employer. Employers with very large payrolls must also have the additional capability to split/join messages in accordance with the relevant conformance profile spec.

12 New ATO services available to employers (optional) FVS - Fund Validation Service Fund details look up service Excludes SMSF s Employer employee Validation Service TIC TFN Integrity Check service for employers Expected to be available in July 2014

13 Part 3: The VicSuper Solution

14 Key considerations Employer Timing 1 July 2014 Deadline Complexity - XBRL / EBMS Error message handling Choice of fund - SMSF s Adverse publicity Cost Development and VicSuper ATO seems to be looking to default funds to drive solutions Cost The competitive landscape Privacy Sole purpose test ongoing maintenance

15 The VicSuper solution VicSuper to act as the employers Agent Default contribution payment Service is run from behind VicSupers firewalls. Employer All data VicSuper Clearing House Website (Employer will be required to perform data verification) VicSuper default data VicSuper Core Systems Payment information Choice Data Choice contribution payment:- Westpac Direct Debits the employers nominated bank account for the choice amount. Westpac QuickSuper clearing House Gateway This will be provided free of charge Choice funds

16 Meeting the employers obligations Payments and data to be sent on the same day Validation of mandatory data Defined benefit funds The solution will accept ESSSuper data Except Salary and Service history data (which are okay) Error Messaging and employer profile obligations Errors in relation to VicSuper members will not be returned electronically we will attempt to resolve them and contact you. ATO compliance Completely compliant as an interim solution until 1 July Discussions are ongoing regarding the interim status as 40% of the Super industry are effected.

17 Privacy of choice data 1. The Department of Treasury and Finance (DTF) have circulated a paper on SuperStream which states that DTF are aware of VicSuper clearing House offering and are satisfied with the privacy arrangements VicSuper have made. 2. Employers should look to their privacy policy first. 3. The Terms and Conditions document that we mutually agree to will specifically address privacy and use of data. 4. VicSuper will be changing our privacy policy to cater for the Clearing House data. 5. VicSuper is willing to sign any other agreement the employer provides as long as it allows VicSuper to fulfil it s obligations.

18 Questions?