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Superannuation clearing houses have been around for a while now, offering a more streamlined way of managing employer superannuation contributions. There has been increased demand for this service since the introduction of choice of super fund in 2005.

What is a Superannuation Clearing House?

Quite simply, instead of paying super to multiple funds, employers pay their employee contributions to the clearing house and it then directs the money to the relevant funds.

If you’re working in payroll you have probably noticed that managing super contributions is now a lot more complicated. You have many more super funds to deal with and you are busier making sure the right payments go to the right funds and on time.

Superannuation clearing houses have emerged as a way to streamline the process, saving you the time and effort.

What are the Options?

1. You have various options if you are considering using a superannuation clearing house. There are third party companies that can manage this for you, such as Click Super. These companies offer their own charging model designed to significantly reduce the cost to your business to manage employee super.

2. Many banks offer a clearing house solution, for instance Bank of Melbourne. Your organisation’s bank may provide a suitable service.

3. Most superannuation funds now offer their own clearing house service for their employers. Using your default super fund can be a cost effective option, in fact it is usually a free service with certain conditions. For example, a fund may require that at least 50% of your employees are with the default fund. You may also find that some of these conditions can be negotiated.

What should you be aware of?

  • Be sure the data you send to the clearing house is accurate. If you’re sending a report make sure all the details are correct.
  • You need to get clarification from the clearing house about the time it will take for funds to be received by the individual funds. Do they adhere to standard clearing times or do they have their own set of rules?
  • Find out about the process for refunds. Again, you don’t want unnecessary delays.
  • It is usually better to have discussions directly with the superannuation clearing house, rather than with the super fund representatives

Whichever superannuation clearing house you choose, they will require data from you in a specific format. The data will include enough detail to enable them to distribute the contributions accordingly. You then send the contributions as a single payment and the clearing house will send you a payment confirmation.

What are the advantages?

  • You only have to make one electronic payment to the clearing house. You transfer superannuation contributions for all your employees in a single transaction to a single location.
  • It saves you time by minimising the administrative effort and paperwork involved in paying contributions to numerous superannuation funds.
  • It helps you meet your superannuation guarantee obligations, reducing red tape and associated compliance costs.
  • Once the process is set-up, it only takes a short time to process payments.

If you’re finding that managing your employee contribution payments is becoming an onerous task, you might want to consider one of the many superannuation clearing houses that are available. If you already use a clearing house, leave a comment and let others know what you think of the service.