From 30 November 2019 all rollovers to or from SMSFs will be required to be conducted via SuperStream. To date SMSFs have only been required to be registered for SuperStream where contributions were received on behalf of a member from an unrelated employer.
APRA funds have been using SuperStream for rollovers between other APRA funds since 2013 and for contributions from 2014 when the contribution protocols were introduced. These changes will bring SMSFs in line with the superannuation industry as a whole.
So what does this mean, and how will impact your clients and practice?
SuperStream and Rollovers
Historically rollovers to SMSFs from large APRA funds take a long time to finalise. The extension of SuperStream to rollovers for SMSFs seeks to rectify this and expedite rollovers across the sector. Rollovers will finalise in a matter of days rather than weeks as the regulations require processing to occur within 3 business days.
Rollover reports will be transmitted electronically via the SuperStream reporting system. These will be received or transmitted through your SMSF software. Paper rollover forms will not be required. The rollover payment will be directed to the funds nominated bank account.
Other changes - Reporting to the ATO
From 30 November 2019, SMSF trustees will be required to notify the ATO of their SuperStream provider’s electronic service address (“ESA”) and bank account details no later than 10 days prior to the first reportable transaction taking place. This means that all funds currently registered and receiving contributions will need to report their SuperStream details to the ATO.
It will be important to ensure that the information is current and updated should any changes occur. Accountants and administrators will need to update their checklists and procedures to include these new requirements.
For existing funds, ESA and bank account details can be reported in the SMSF annual return. Depending on when the annual return is lodged there may be a need to report earlier. Details can be reported or updated using the ATO Change of Details for Superannuation Entities form (NAT 3036).
For new SMSF registrations, the Australian Business Register (“ABR”) online application now allows for the SuperStream electronic service address (ESA) to be recorded. However if this is not known or missed at the time of application these details can still be added later using the ATO Change of Details form.
Helping the rollover process
The ATO provides a SMSF verification service to APRA funds to ensure the validity of rollover requests. This is an integrity measure and seeks to protect members against fraud. By ensuring that everything is in order prior to rolling over you are ensuring that the APRA fund will receive a clear report. Thus enabling a smooth rollover process.
So what can you do?
- 1Check the SMSFs complying fund status on the Super Fund Look Up service. Funds with a status other than ‘Complying’ or Registered – Status Not Determined’ will be ineligible to receive rollovers or register for SuperStream.
- 2Tax Agents should confirm that all fund details are correct via www.abr.gov.au including:
3 Notify the ATO of any changes to the SMSF details via a Change of Details Form (NAT 3036)
4 Ensure that the SMSFs nominated bank account and SuperStream details have been reported to the ATO
Information for SMSF members
SMSF members will require their SMSFs SuperStream details to provide to employers (contributions) or other superannuation providers (rollovers) in order to direct their benefits to their SMSF account.
Members will require the SMSF’s:
- 2Electronic service address (“ESA”)
- 3Bank account details
Please note that SMSFs are not issued with a unique superannuation identifier or USI. These apply to APRA funds only.
Information for SMSF members
The ATO has previously confirmed that any internal rollovers and in-specie rollovers or contributions are excluded from SuperStream. These transactions are not catered for in the regulations. In-specie rollovers and contributions are to be undertaken in manner agreed to by both parties.
SuperStream registration is not compulsorily required where the following circumstances apply:
However given the low cost and ease of registration, SMSF administrators and accountants may seek to register all SMSFs for ease of administration of their SMSF client portfolio and to ensure compliance for all funds.
Legalwise - Thursday, 21 March 2019
Tracey Scotchbrook is a SMSF Specialist Advisor and Director of Superology Pty Ltd. Contact Tracey at firstname.lastname@example.org