SuperStream makes it easier for SMSFs to collect and allocate employer superannuation guarantee (SG) payments by using the SMSFs ABN as the fund identifier and an Electronic Service Address (ESA) to process the contribution data.
Before the introduction of SuperStream, many employers were making SG contributions via cheque or EFT. This caused issues with funds being lost or not enough electronic data being sent with the contribution, to be accurately allocated to the member.
Currently, only contribution data is supported by SuperStream for SMSFs. This will be changing from the 1st of October this year, to incorporate rollovers. It will become mandatory to use Superstream when SMSFs are rolling out member benefits or when super funds are rolling in member benefits to an SMSF.
Currently, it is compulsory to use SuperStream to process contributions to SMSFs where an employer is paying SG contributions and the employer is not a related party of the SMSF trustee.
What will change from the 1st of October 2021?
You won’t be able to rollover funds to or from your SMSF if you don’t have an active ESA or your ESA doesn’t provide rollover SuperStream services. This includes at the establishment of an SMSF and on the wind-up. This will also apply to receiving and processing certain release authorities, such as the first home super saver (FHSS) scheme.
Due to this mandatory change, SMSFs will no longer be able to rollover benefits out of an SMSF by simply sending a cheque along with the rollover benefit statement (RBS) to the receiving fund. This will no doubt strongly impact SMSF administrators who don’t use specialist SMSF accounting software.
Where an SMSF has an ESA and they have the ability to use SuperStream for rollovers, the ATO will begin issuing release authorities via SuperStream (e.g. Excess concessional contributions or Div 293 payments where trustees have elected it to be paid by the SMSF).
Requirements when you receive a rollover request from the 1st of October 2021
Rollover requests can be made via a member’s MyGov account or by completing a paper form and lodging it with the transferring fund. If a rollover request is made via MyGov, the ATO will verify the member’s identity and membership details, before sending the information to the transferring fund. If the request is made via paper, the transferring fund will need to verify certain information with the receiving fund, to ensure that the rollover is not part of an illegal early release scheme.
APRA states that the rollover request must be completed by no later than the third business day from when it is received. However, where the fund needs to sell investments to finance the rollover, APRA has allowed a maximum of 30 days from the time all mandated information has been received, to complete the rollover. In this situation, trustees are required to ensure that they have received written consent from all parties.
What if you don’t comply with the SuperStream rules?
If the fund doesn’t comply, the SMSF trustees have breached the operating standards of SIS. This could result in an administrative penalty for each trustee of up to $4,400.
From the 1st of October 2021, SMSF Auditor’s will be required to report non-compliance with the SuperStream rollover rules. The auditor will also be reviewing if the rollover was completed within 3 business days. Where the auditor finds an SMSF is non-compliant, they will notify the trustees in writing, qualify Part B of the audit report and may report it to the ATO in an Auditor Contravention Report.
Keep up to date with all the latest SMSF news and updates by subscribing to SMSF Engine’s newsletter.