Employers will soon be able to use a government-run clearing house facility to make their employees' superannuation contributions.
The Federal Government has allocated $16 million over three years for the purpose of setting up a clearing house facility to help all employers make superannuation contributions on behalf of their employees under the choice of fund framework.
The initiative was contained in Tuesday night's budget and is expected to commence operation from July 1, 2009.
"At the moment because of fund choice employers are drawing cheques to multiple funds, which creates an administrative burden, so this initiative is designed to streamline the whole payment system," Deloitte superannuation assurance and advisory service partner Richard Rassi said.
For employers with less than 20 people the service will be free while larger organisations will have to pay a fee that has yet to be determined.
The move was likely to decrease superannuation administrative costs in general and should also help reduce the risk of fraud, Rassi said.
"Whenever you have multiple payments of significant volume coming out of an organisation it always increases the potential for fraud. If you've got 30 cheques that you're drawing to a multitude of superannuation funds, drawing a cheque to a bogus fund may not get detected," he said.
"But if you're only drawing one cheque it improves the whole transparency and control over it. The risk is pushed into the clearing house so it is absolutely critical that it has a good set of internal controls, policies and procedures in place from day one."
The clearing house will also make it easier for employers to meet their contribution obligations as once the cheque has been forwarded to the facility they will have been deemed to have made the required contributions.
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