SuperStream introduced industry-wide standards for the electronic transfer of payments for superannuation and rollovers.
It was clear the initiative would save the industry hundreds of millions of dollars a year and would reduce the problems of lost super contributions.
The situation often quoted by super fund executives, where an employer once sent a cheque to a fund with the only description given as “super for Sue”, should no longer occur under the new system.
Yet it is also a very ambitious project and the recent delay in its introduction could be an indication of a much longer implementation phase and more IT spend before it is up and running.
In May, the federal government gave super funds an extension in relation to the SuperStream contributions data standards from 2 November 2014 to 1 July next year.
It was the second time the government had extended the original deadline of 1 July this year.
The new extension was necessary because several very large super funds would not have been compliant by the deadline. This would not only have breached regulations, but also would have created big operational issues for them.
The further delays are no surprise.
Apart from super funds’ own logistical difficulties in dealing with the raft of changes under Stronger Super, the delay of the implementation date was also in part the result of SuperStream’s ambitious program.
The message standard that was taken up as the mandatory form of electronic communication, called AS4, was the latest in business-to-business document exchange.
But adopting this cutting-edge technology also meant relatively few stakeholders were familiar with or ready to adopt the new standard.
In fact, in the whole world there are currently only four companies that offer officially certified communication platforms that adopt the new message standard, according to software tester the Drummond Group.
When considering the number of different organisations involved in the implementation of SuperStream, such as employers, services providers, super funds and self-managed super fund trustees, the immensity of the project becomes clear.
All these parties are trying to implement an entirely new technology, all at the same time and on a very tight schedule.
Unsurprisingly, this has resulted in some challenges for organisations to get ready.
Australian Prudential Regulation Authority-regulated funds that want to make use of the extension will now have to provide a detailed implementation plan to the Australian Taxation Office (ATO) by 30 September.
This further delay has caused some bad blood with super funds that have spent significant amounts of money to meet the deadline, as the cost of the project is already high.
Apart from their own costs, super funds have to pay a levy for the ATO to implement systems, which is in excess of $400 million in total.
And the ATO is looking at additional technology development towards the end of this year, which will incorporate the new message standard for accessing and updating the fund validation register.
This is likely to lead to further costs for all organisations involved and potentially further delays.
It goes without saying that, once in place, SuperStream will make life easier for many organisations, but perhaps expectations of the promised $1 billion a year in savings for the industry might have to be adjusted downwards.
