APRA offers super industry respite
The Australian Prudential and Regulation Authority said on Friday that super funds would not be required to report their progress with the changes until October 2014.
The changes, called SuperStream, are designed to improve the "back office" of superannuation and cut costs. They will allow super fund members to track their accounts through an online portal and consolidate accounts electronically, and require funds to establish standardised forms. Cheques for super payments will be progressively phased out, in favour of online payments.
John Brogden, chief executive of the Financial Services Council, said APRA's decision was "practical and sensible given the substantial number of reforms the industry is yet to implement".
"We support measuring the efficiency benefits of SuperStream over time as we believe it will increase the efficiency and cost effectiveness of the industry," he said.
The Association of Superannuation Funds of Australia said it was "pleased that APRA has indicated that they will consult with industry over the coming months".
The delay would "enable the industry to design and implement the collection and reporting of the relevant data", ASFA said.
Tom Garcia, CEO of the Australian Institute of Superannuation Trustees, said the body was "very pleased that APRA has listened to industry concerns and recognised that more work needed to be done on APRA's benchmarking tool for SuperStream data reporting. The whole industry is working with the regulator to ensure that the SuperStream reforms are implemented as smoothly as possible and deliver significant savings to members."
Frequently Asked Questions about this Article…
APRA said super funds would not be required to report their progress on SuperStream until October 2014, after industry groups told the regulator they could not meet the original September quarter deadline.
SuperStream is a set of reforms designed to improve the ‘back office’ of superannuation: cut administration costs, let members track accounts via an online portal, enable electronic consolidation of accounts, require standardised forms and progressively phase out cheques in favour of online payments.
APRA delayed reporting to allow more industry consultation and because super industry groups said they needed extra time to implement the reforms and to design and test the data collection and reporting processes, including APRA’s benchmarking tool.
Industry groups expect SuperStream to increase efficiency and cost‑effectiveness across the sector, and APRA and industry bodies intend to measure those efficiency benefits over time to confirm savings for members.
One of SuperStream’s aims is to allow electronic consolidation of accounts, so members should be able to combine multiple super accounts more easily through standardised electronic processes and an online portal.
Yes. The SuperStream changes will progressively phase out cheques for super payments and replace them with online payment processes.
The Financial Services Council (John Brogden), the Association of Superannuation Funds of Australia (ASFA) and the Australian Institute of Superannuation Trustees (Tom Garcia) welcomed APRA’s decision, saying it was practical, allowed for consultation, and would help ensure smooth implementation and meaningful savings for members.
For everyday investors the delay means regulators and funds will take extra time to get SuperStream systems and reporting right. Funds won’t have to report progress until October 2014, giving the industry months to consult, design the data collection and reporting processes, and aim for a smoother rollout that delivers cost savings.
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