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  • SuperStream program benefits report – executive summary

    The scope of this report is to detail the benefits arising from the ‘SuperStream’ Program (SuperStream) up to December 2016.

    For a copy of the full report, email

    SuperStream arose from the 2010 Super System Review (Cooper Review) into the governance, efficiency, structure and operation of Australia’s superannuation system.

    The terms of reference included a requirement to conduct the review focusing on the best interests of the member; maximising retirement incomes for Australians; and consulting widely with the superannuation industry, other stakeholders and the broader public.

    The Cooper Review found that much of the so called ‘back office’ of the superannuation industry was manually transacted and reflected a lack of industry data standards. This inhibited the efficient processing of transactions resulting in millions of ‘lost’ superannuation accounts and created difficulties for members to consolidate multiple accounts. These features added to the administrative costs for members and led to ongoing administrative complexity.

    The review also found that employers often struggled to get their employees’ contributions right as ‘choice of fund’ took hold and their compliance costs increased. It was also found that employers varied widely in their capabilities, especially across small business, as they were challenged to manage the rising number of divergent funds they had to deal with in supporting their employees’ exercise of choice.

    It was further noted that previous attempts by industry to innovate had failed to produce the desired results. This led to the creation of SuperStream.

    SuperStream was designed to be a comprehensive package of legislative and administrative reforms. It was planned to provide the superannuation industry with ‘fit for purpose’ data standards to modernise the processing of fund member transactions, and also improve the member, employer and fund experience and their confidence in the superannuation system.

    In November 2010 the government introduced legislation to improve the data quality; allow the use of tax file numbers (TFNs) as the primary account identifier; encourage the use of technology to improve processing efficiency; improve fund-to-fund rollover processing; and the way contributions were made by employers.

    In consultation with the superannuation industry, the Australian Taxation Office (ATO) led the planning and implementation of system reform. SuperStream introduced a data and payment standard to drive more automated and timely processing of employee transactions.

    The active support of industry for these initiatives was pivotal. This support and a recognition of the importance of the reform resulted in industry co-funding SuperStream in 2012.

    With this industry engagement a digital standard was designed to improve efficiency, provide an easier system for employers to use, reduce lost accounts and provide a timelier flow of money to members’ accounts. These changes required new support and enabling services for industry and fund members along with a series of staged technological implementations over the last four years. Importantly, it was also designed to simplify processes for consolidation of accounts and reduce the number of multiple accounts held by members.

    Since 2012 the size and scale of the SuperStream changes have been significant. They have impacted on and required the support of over a million businesses including around 800,000 employers, 2,500 Australian Prudential Regulation Authority (APRA) funds and 350,000 self-managed super funds (SMSF).

    To move to greater efficiencies and member benefits, key legislative and regulatory instruments were necessary to ensure industry compliance. These included:

    • the expanded legal use of TFN powers to enable fund trustees to use tax file numbers as a locator in July 2011 and to consolidate accounts in January 2012
    • the introduction of the Superannuation Legislation Amendment (Stronger Super) Act 2012 and the supporting regulation in November 2012 (this outlined the framework for the introduction of mandated standards, enabling services and improved performance benchmarks)
    • the replacement of the 30-day rule for funds to process contributions and rollovers with a three-day processing rule to significantly improve the allocation of money to members’ accounts
    • the requirement for employers to provide a specified minimum data set which greatly reduced the wide variation of data items deemed to be ‘optional’
    • the introduction of a mandated annual cost recovery mechanism in the form of a SuperStream levy on APRA funds which was ultimately set at $427 million over seven years
    • the introduction of the Superannuation Data and Payment Standards 2012 set out the legal instruments for data standards, messaging protocols, payment methods and an implementation pathway for rollovers, contributions and other reporting transactions.

    From these legislative and administrative reforms, innovation was driven across the already complex stakeholder arrangements in the industry. Funds and employers were able to draw on a wide array of competitive solutions. New commercial relationships were developed across superannuation administrators, clearing houses, payroll software companies, accountants and book-keepers.

    The key benefits of SuperStream are categorised into three core outcomes: lower cost; ease of operation in the superannuation system; and increased retirement savings.

    At the core of these benefits is the emergence of a network of messaging gateway providers. These gateway providers efficiently process over 80 million transactions per year in a standardised digital form.

    In 2016 an independent industry oversight board was formed, the Gateway Network Governance Body Ltd (GNGB). This completed the framework announced by the (then) Assistant Treasurer Senator the Hon. Arthur Sinodinos AO in his press release of July 2014.

    Through the SuperStream journey, the role of the ATO in the superannuation system has changed quite dramatically. The ATO now plays a major enabler and partner role with industry, as well as overseeing administration of the standard.

    To manage and support this set of changing roles, ATO-led collaborative industry bodies have formed with arrangements to now support the SuperStream changes. These arrangements have been seen as great value to SuperStream stakeholders.

    With the total investment to date at an estimated $1.5 billion over the 2012 to 2018 financial years, it is recognised that the implementation costs have been significant. Footnote1 The cost has largely been borne by APRA funds, and employers or their agents. While this investment cost is significant, so too are the benefits that have commenced and will continue to flow from system maturation.

    Specifically, estimates of these realised efficiencies are approximately $800 million per year, comprising about $400 million per year for employers and a further $400 million per year for funds. More significantly, the estimated savings for members from this investment is estimated at $2.4 billion savings per annum.

    When industry performance is compared to the base year of the Cooper Review in 2010, significant shifts in productivity and efficiency are already clearly visible by:

    • a sharp rise in the volume of digital transactions for contributions and rollovers
    • a massive reduction in cheque numbers used in payments
    • closing large manual processing teams like mail rooms and identity checking
    • faster rollovers of member monies from fund to fund
    • greater consolidation of member accounts
    • a sustained drop in the number of lost super accounts.

    This report confirms the magnitude of the industry-wide shifts in productivity and efficiency by these indicators:

    • approximately 17 million fewer cheques handled each year by funds, which is an 87% reduction in cheque numbers since the Cooper ReviewFootnote2
    • over 85% straight-through processing rates on contributions
    • over 95% straight-through processing rates for rollovers now allowing automated allocation to a member’s account
    • over 6 million member identity matches per year due to: the integration of the ATO’s TFN validation service into fund administration processes; and a reduction in fund complexity for employers from a median of 30 sending channels down to one or two
    • strengthened identification from TFN usage for member accounts reducing the growth in lost member and unclaimed monies, while helping members recover and claim these monies
    • faster overall allocation of money to accounts resulting in member’s earning at their nominated investment rates at the earliest possible time.

    As importantly, the degree of improvement to the experiences of fund members, employers or superannuation funds is measurable.

    A member’s experience has been improved from:

    • time savings in rolling over and consolidating super accounts as members can now complete a rollover in three days compared to an average of 45–60 days previously
    • greater ease in rolling over and consolidating members accounts as account consolidations can now be performed online by a member within minutes
    • a reduction in unnecessary accounts and the recovery of lost and unclaimed monies which has led to a reduction in lost member accounts by nearly 90% in the last six years (that is 5.2 million accounts recovered)
    • stronger protection of a member’s retirement savings through reduced fees from consolidations and faster allocation of member’s money into their accounts.

    An employer’s experience has been improved from:

    • less processing time for completing contributions with an average 70% time saving and $400 million in ongoing efficiencies
    • simplification in sending contributions through a single channel so that in the case of a typical 60 employee business, eliminating interactions with between 15–30 funds
    • a reduction in re-work through receiving help to get data right at the source via improved tools and processes.

    A super fund’s experience has been improved from:

    • the transition to digital rather than manual transactions for contributions and rollovers with digital now accounting for over 95% of all transactions
    • widespread automation of transactions with use of straight-through processing with automation rates now over 85% in contributions and 95% in rollovers
    • improved quality of key data holdings, in particular of member details from compulsory TFN usage as an identifier and from new data validation services
    • the simplification of data transfer between employers and funds as variation in the payroll data sets has reduced and a standardised taxonomy has become the norm.

    This report shows that the SuperStream outcomes of lower cost, ease of operation, and increased retirement savings can be easily traced to these benefits.

    Specifically, this report illustrates that the implementation of SuperStream during July 2012 to December 2016 has delivered a range of benefits that have fundamentally improved the superannuation system experience for fund members, employers and funds.

    Looking ahead, there are other program elements to be completed in 2017–18.

    A second benefits report will be completed when the remaining reporting components of SuperStream are finished by mid-2019.

    Footnote 1

    This is based on estimated Super Fund costs of $900 million and estimated Employer costs of $600 million as outlined further in this report.

    Return to footnote 1 referrer

    Footnote 2

    ATO estimate based upon total payments adjusted for Clearing house aggregation and existing electronic payments

    Return to footnote 2 referrer

      Last modified: 14 Mar 2019QC 53178