We recently attended the ASFA conference in Sydney, where nearly 1,000 delegates gathered to hear from industry experts about the future of superannuation. Among the standout sessions were talks on quantum computing and AI. However, a particularly practical and pressing topic for the superannuation industry was the upcoming changes associated with PayDay Super.
Damian Hill from the Commonwealth Superannuation Corporation (CSC) led a panel discussion featuring Emma Rosenzweig, Deputy Commissioner for Superannuation and Employer Obligations at the ATO, Michelle Bower, CEO of the Gateway Network Governance Body (GNGB), and Sarah O’Brien, Head of Regulatory Policy at Rest.
A quick poll of the audience revealed that the biggest challenge in people’s mind when it comes to getting ready for PayDay super is ‘handling increased transactions’, with 31% of the vote. Next was ‘less time to return unallocated payments’ with 27% of the vote, then ‘increased support requested by employers’ with 19% of the vote, ‘still waiting for administration and policy parameter’ with 14% of the vote and finally ‘the 1 July 2-26’ start date with just 9% of the vote.
The discussion largely centred on the impact of PayDay Super for funds and employers, clarifying key requirements. Employers will need to ensure super contributions are sent to funds within seven calendar days, while funds have three business days to allocate these contributions to employees’ accounts. This creates additional pressure for funds to accurately match contributions.
Interestingly, audience questions were about:
- the New Payments Platform (NPP), which unlike BECS, allows real-time payments, and its use in Superannuation payments. The ATO have confirmed they will look at updating Superstream messaging standards to include NPP as a payment method. There are also working groups discussing enhancements to the fund validation service (FVS), to support NPP payment methods, such as including whether an account is NPP reachable and potentially adding PayIDs. The discussions are still ongoing, but we’ll provide updates as we get them.
- increases in transaction volumes and the impact on current commercial arrangements between funds and their administrators or gateways. The transaction volume is anticipated to increase 3-5 times under Payday Super. We already see peaks on Wednesday and Thursdays so we can expect to see an increase in volume on those days. But we do know many organisations are assessing their options for Superstream and payments, given the impending changes.
- what data or information can be provided to assist in supporting or motivating employers to provide accurate data to super funds in their contribution files, as this will vastly improve match rates. The ATO have confirmed there will be no changes to any of the services currently offered, so it will likely be up to the industry to decide how best to manage this change and ensure data is exchanged correctly the first time around.
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