The government will need to invest in the Cooper review’s SuperStream initiative if the regime is to be implemented successfully, according to a number of industry participants.
The initiatives included the mandatory use of tax file numbers, mandated data standards and a take-up of e-commerce initiatives.
“The government will have to substantially contribute to the cost of the [SuperStream] infrastructure,” SuperPartners manager of strategy and policy Hans van Daatselaar said.
“The SuperStream initiative will introduce efficiencies in the system. This will mean fewer accounts and less revenue for funds. At the same time, funds will face increasing costs to put the infrastructure in place.”
Van Daatselaar said the government could fund the project by investing the funds from lost super.
Trustees could look at investment partnerships with their administrators in order to get the benefits of investing in the SuperStream regime, Sunsuper general manager of IT and operational capability Francis Cox said.
According to Cox, 24 industry funds at an industry funds forum have already indicated they would support such an initiative.
The Australian Institute of Superannuation Trustees (AIST) said super funds, both in the not-for-profit sector and the government, will need to work together to implement the project.
“A number of SuperStream facilities come through administration houses, but where there are a number of funds working together, the economies of scale will be shared,” AIST chief executive Fiona Reynolds said.
While investment will be needed, governance was also a critical factor to ensure the success of SuperStream, according to the Association of Superannuation Funds of Australia (ASFA) chief executive Pauline Vamos.
“We need to ensure that we get the governance structure in place so that the initiatives under SuperStream can work effectively. Investment, however, is always part and parcel in implementing a new system,” she said.
A full article on how the superannuation industry is grappling with e-commerce initiatives is covered in the June quarterly edition of Investor Weekly.
