What is the SuperStream levy

SuperStream is name of a group of initiatives to improve superannuation, and in particular the ‘back-office’. As you know, super is a complex area. Currently to do what you want with your super, whether you wish to contribute money into super, change or consolidate superfund accounts you have to follow the requirements of the particular superfund. Unfortunately, different funds have different requirements leading to confusion and complexity. Compare this to the banking system which allows you to start a transfer between any two bank accounts by clicking a button.

 

SuperStream benefits for you (the member)

After the SuperStream initiatives are up and running you should:

  • See on your payslip when your super has been paid into your fund (as opposed to just the amount). This simple step should help people avoid breaching the concessional contributions caps.
  • Be able to login to an online portal and view all your super accounts.
  • Electronically consolidate accounts and have inactive accounts under $1,000 automatically consolidated into your main super account (unless you opt-out).

SuperStream benefits for employers and funds

Employers will have simplified processes and be able to make electronic payments, removing the need to pay each different fund according to its requirements.

Funds will also have simplified processes in processing contributions and transfers, common among all funds. Funds will be able to use member tax file numbers to help them keep track of member accounts.

 

The SuperStream Levy

These initiatives sound great, however, they come at a cost ($467 million over seven years). The cost is to be met by fund members with a levy being charged across APRA funds. So if you don’t have your own Self Managed Super Fund, the levies over the years will be charged to each member’s account. The first SuperStream levy was charged by some super funds in December 2012. Over the next 6 years additional SuperStream levies will be deducted from your super balance.

 

What will it cost me?

The first year SuperStream cost estimate from 2012/2013 is $121.5 million (approximately 26% of the total estimated $467 million). When you consider there are 33 million APRA superannuation accounts existing today, it is roughly $4 per account. However, if funds decide to apply the levy based on member balances the levy would be as follows:

Account Balance

(From Treasury website)

Approximate SuperStream Levy

(From Treasury website)

Estimated total cost (based on current levy being 26% of total)

$50K

$8.70

$33.40

$100k

$17.40

$66.88

$250k

$43.50

$167.20

$500k

$87.00

$334.40

$1m

$174.00

$668.79

$2.5m

$435.00

$1,671.98

The current levy is the first levy, however if the current estimate of $467 million over six years is accurate, then this will be the highest yearly levy.

 

I didn’t agree to a levy

While I do consider it is slightly unfair that these costs aren’t met out of government revenue, I am looking forward to a simpler super system.

Posted in Superannuation

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