Author: Emma Partenza, Manager, TAG Financial Services
What’s new?
From 1 October 2021, it will be compulsory for SMSFs to also use SuperStream for rollovers of member’s superannuation benefits either into or from a SMSF. Just like superannuation guarantee payments, it provides administrators with an electronic record to support the transaction whilst enabling faster processing of all rollovers.
Where a SMSF is not registered for SuperStream, rollovers will not be able to be undertaken manually; paper forms and cheques can no longer be used.
Requesting a rollover
The member will need to request partial or full transfer of their superannuation benefits using the ATO form NAT 75359; or alternatively, via their MyGov account.
Rollovers out of a SMSF must be made from the fund within 3 business days of receipt of the rollover request.
How will it work?
SMSFs will require an electronic service address (ESA). Ensure the message provider of choice provides for rollovers via SuperStream. SMSFs must now ensure their bank account details are up to date with the ATO, to ensure payment of rollovers into the fund within the prescribed timeframe.
SuperStream is also extending to common release authorities including excess contribution notices, Div 293 notices and First Home Super Saver release authorities.
These authorities will be sent electronically (no longer via paper), increasing the timeliness of release of benefits for members. It is important to note that release authorities are not compulsory to be included in SuperStream at this time.
Where a fund is not required to be registered for SuperStream, they can continue receiving these authorities in the current paper format.
Implications
Where an SMSF is not ready to be SuperStream compliant by 1 October 2021, they will be unable to receive or process rollovers out of the fund.
In addition, where the fund’s lodgements are not up to date and the fund’s registration details are removed from the ABR, rollovers to and from a SMSF will become affected. Rollovers will not be able to be processed, the same for which currently applies in respect to super guarantee contributions (they cannot be received by the fund in this instance). Trustees must ensure lodgements are first up to date. It can take up to 6 weeks for the ABR to be reinstated and the fund’s ESA to become active again.
Penalties
SMSF Trustees may be in breach of the SIS operating standards where they have failed to comply with a rollover request within 3 business days.
SMSF Audit
From 1 October 2021, auditors will also be required to report any contraventions of breaches by SMSFs failing to rollover benefits within the prescribed timeframe, under the SIS Payment Standards.
New ATO alerts
Trustees will commence to receive alerts (email or text message) notifying them of a rollover request. This further extends the ATO’s alert system which has operated since February 2020 upon lodgement of the fund’s annual return. To notify the trustee that certain changes have been made to their fund (yes, lodgement of a document is a change to the fund).
The extension to rollover requests means trustees will receive notification when the fund uses the SMSF verification service to verify the SMSF’s details prior to making a rollover. Such alerts are to safeguard the member’s retirement savings and reduce the risk of fraud or misconduct. There is no action for the trustee, as long as they are aware of the rollover.
Remember, there is only 1 month left for SMSF Trustees to become SuperStream compliant.
If you have any questions please contact us on 03 9886 0800 or via email.
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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 2021. Please do not reproduce without the expressed written consent of the author.