New research by MYOB reveals that 53 per cent of Australian SMEs are unaware of the Your Future, Your Super legislative reforms which are set to come into effect today, 1 November, with only one-third saying they can be compliant by the deadline.
The research, undertaken with more than 520 SME owners and operators, found many respondents were not set up to implement the new requirements, with 60 per cent stating they use paper forms to capture Tax File Number (TFN) and superannuation information. Paper onboarding rises to 71 per cent among respondents from the manufacturing and wholesale industry.
With three in 10 SMEs onboarding a new employee at least once a month, and survey respondents estimating Your Future, Your Super could take an average 12.7 hours extra in compliance time a month, MYOB’s General Manager for Financial Services, Andrew Baines, urges business owners to arm themselves with information about the legislative change.
“Our data demonstrates 64 per cent of small business owners will handle Your Future Your Super themselves and just 17 per cent say they plan to appoint an accountant or bookkeeper, so it’s critical SMEs read up on their obligations ahead of the incoming deadline,” Baines said.
The Your Future, Your Super legislation aims to give individuals control of their superannuation funds. MYOB noted that 60 per cent of SMEs believe the legislation will benefit their new employees. However, only 27 per cent see Your Future, Your Super as a good thing for their business, which MYOB notes could be improved to ensure business owners feel comfortable with the legislation compliance ahead of the deadline.
“We know small-business owners are resource and time-poor. However, if they don’t take the time to understand their obligations and put processes in place, they risk time wasted and possible penalties and costs of non-compliance,” Baines said.
In conjunction with the release of the report, MYOB has partnered with Sydney-based fintech Flare to help businesses to provide a streamlined solution for Your Future, Your Super compliance requirements. Flare’s super selection platform allows employees to make an active choice of fund at the point of onboarding, ensuring employees are engaged with their super, and removing effort for employers to conduct stapled fund lookups. Every employee can port in a pre-existing superannuation account from any fund, or switch easily to a fund better suited to their needs.
Daniel Cohen, Co-Founder of Flare, says the new compliance considerations that come with Your Future, Your Super present SMEs with an opportunity to review their total employee onboarding process.
“For businesses that aren’t set up with digital onboarding and super selection, stapled fund lookups will not only cost time and money, but also open potential for errors and cybersecurity breaches – and give rise to penalties for non-compliance with the new rules,” Cohen said. Flare has collaborated with MYOB to integrate our full digital onboarding suite into its products.
“This solution not only helps reduce cost and risk for employers but also benefits employees by ensuring they engage actively with their superannuation and make the right choice of fund for them,” Cohen added. “Driving this engagement with superannuation helps every hardworking Australian live their best financial life and enjoy better retirement outcomes.”