Author: Emma Partenza, Manager, TAG Financial Services
The compulsory use of SuperStream by SMSFs for processing rollovers of member’s benefits has now been in place for almost six months. Whilst the electronic processing of rollovers in and out of a SMSF has been streamlined and is working efficiently, there are still complications providing headaches for SMSF members and their advisers rolling money into a SMSF.
Complications we have encountered
Per the ATO guidelines for SuperStream, SMSFs are required to have financial institution details and ESA details up to date, so external funds can confirm these details to the details supplied in the electronic rollover request. Industry and retail superannuation funds are requesting additional information that is in addition to these requirements. Many funds have been requesting information such as:
- Certified copies of ID’s
- Certified copy of the latest SMSF bank statement
- Copies of rates notices
The SuperStream standards require a trustee to rollover benefits no later than three (3) business days from receiving the notification request, which is generally not being adhered to. Communication from APRA funds in respect to issues preventing the rollover being made are often not forthcoming to the member or adviser, seemingly playing any tactic to delay the rollover of member benefits.
In the updated ATO SuperStream rollovers guide, the three-day requirement can be extended only where the trustee requires further information. However, additional information must be requested from the fund trustee within five (5) business days of the member’s initial request and once supplied, the rollover be processed within three business days. We have encountered on more than one occasion non-compliance with either of these timeframes and no forthcoming communication from non SMSF funds.
Ensure information is correct
It is best practice to:
- Ensure the fund’s details with the ATO are correct prior to requesting a rollover. The fund’s ESA needs to be one that allows for rollovers to be made, and financial institution details must be recorded with the ATO for the transfer fund to be able to make the payment electronically.
- Ensure member details are consistent between the SMSF, the members transfer fund and the ATO.
In addition to these best practises, it would be prudent for SMSF trustees to confirm banking details with the transfer superannuation fund, as we have had an experience where the rollover out of an SMSF did not reach its destination. This payment was made directly using the SuperStream payment advice provided. Like SMSFs, all funds must have their banking account details up to date to ensure payments can be made in accordance with SuperStream standards. On this occasion the bank account details were correct (upon confirming with the superannuation fund), however, the incorrect account name was provided via SuperStream. Details for rollovers from an SMSF are obtained via the fund validation service. In this situation, it was unreliable and inconsistent.
Frustration for advisers
Advisers and members are spending a great deal of time following up these requests to ensure additional (unnecessary) information is being provided so benefits are rolled over in a timely manner.
These issues demonstrate that advisers must keep on top of SuperStream requests in and out of SMSFs. It is clear that difficulties experienced thus far with this regime are still to be overcome.
Electronic processing has yet to streamline these matters for the industry as it is currently not working as effectively or efficiently as it should. Frustratingly, we are still employing the same practises we did prior to this regime when the fund completed a paper RBS form and cheque manually.
ATO Information
The ATO has announced a temporary measure to overcome issues obtaining an ESA allowing rollovers.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2022. Please do not reproduce without the expressed written consent of the author.