Paperless funds to ease super duplication
Paperless funds to ease super duplication
April 04, 2005: The complications associated with transferring superannuation funds from one account to another for employees when they change jobs or choose different schemes could now be smoothed out following the announcement of a new standard to streamline payments.
SwimEC (superannuation, wealth and investment management Electronic Commerce) has been announced as the new standard for superannuation transactions, contributions and information.
This scheme has been created as a result of the superannuation and managed funds industries joining forces with the Australian Taxation Office and commercial partners to make administering super guarantee payments less hassle for employers.
The Hon Mal Brough, the Minister of Revenue and Assistant Treasurer, said that the advantages of this new standard will mean there will mean there will be less mistakes made through fund transfers and it will save on administration time too.
"The standard will reduce the number of interfaces currently used by different superannuation companies and employers to transfer funds. For example, in the next release, MYOB will incorporate information about employers that will include details of bank accounts, who they are, and their superannuation history, so that employees will not have to complete forms manually, as is done currently.
"This will mean that electronic transactions will be able to be carried out without the need for paperwork."
Rob Hodge, senior policy adviser of the superannuation fund of Australia, added that under the current system, excessive paperwork has led to information being filled into too many different systems, which means mistakes are made frequently, and it takes up time that could be better spent on other tasks.
"When you transfer information from one to another, this increases the chances of information being mistyped, and it takes time to go back to find the right information and correct it too.
"The success of this standard will be based on how many copies choose to incorporate the standard. IMG and Colonial First State have already said they will accept Electronic Fund Transactions with extra details about the employees, so that they do not need further paperwork to transfer the money across from one superannuation fund to the other. We hope that other will opt into the standard too."
Brough emphasised how much trouble this will save big enterprises: "When you think about most employees having about five different funds, and employers have to deal with about 30 different funds for all their employees, it makes sense to introduce a standard that relates to all of these different funds.
"Less paper will mean greater security in terms of the financial information going to the right place first time."
Interestingly, on July 1st, Australian employees will have more say about where their employer's superannuation contributions will be placed. The employers will be able to choose into which funds those contributions are made. This change could intensify the competition among superannuation companies.
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