A superannuation clearing house facility has been an initiative years in the making and for small business owners it will finally came to fruition as of July next year.
Last week, the federal government announced Medicare Australia would provide the facility, which the industry has welcomed as a first step in cutting superannuation red tape and reducing costs.
The Association of Superannuation Funds of Australia (ASFA) said the clearing house would improve the current situation surrounding unallocated money, lost and inactive accounts, and multiple accounts.
"This will lower costs for both employers and funds and allow more employees to exercise choice. It is absolutely vital that when employees change jobs they can exercise choice in an efficient way and stay in their existing fund if they wish," ASFA chief executive Pauline Vamos said.
"Importantly, employers wishing to use the clearing house facility will be required to do so over the Internet."
The free opt-in service, for employers with up to 20 employees, would ultimately improve data quality and reduce processing delays that could cost fund members money, Investment and Financial Services Association chief executive John Brogden said.
"Small businesses are most likely to use cheques and manual transactions, so this initiative from the federal government can have a massive impact on improved efficiency and cost reduction," Brogden said.
Australian Institute of Superannuation Trustees chief executive Fiona Reynolds said the service would help employers meet their obligations under the superannuation guarantee levy.
"We don't consider an employer to have fully met their superannuation guarantee obligations until the payment is in the employee's super account and the details supplied have been verified as accurate and up to date," Reynolds said.
Meanwhile, the competition stakes are set to hot up in the technology service provider space with various firms lining up to work with Medicare.
Payment Adviser head of global sales and marketing Brad Rosenthal said the firm was well positioned to work with Medicare to bring its business-to-business payment solution to Australian superannuation funds and their members.
"We believe our bolt-on solution is scaleable, making it ideal for SMEs [small to medium enterprises] but also suitable for larger employers," Rosenthal said.
Cuscal business development and strategy general manager Adrian Lovney said its online transaction service, ClickSuper, delivered a strong fit for the proposed clearing house.
"We expect ClickSuper to play a critical role in fulfilling the need of SMEs faced with the red-tape riddle of mandated superannuation contribution payments," Lovney said.
