A superannuation industry technical expert has described the federal government’s proposal to include SMSFs within the SuperStream rollover system as a positive development, but has identified some of the other elements included in the initiative as potentially being problematic.
“Rollovers to and from SMSFs will now be subject to SuperStream rules. This is a massive step forward in my view for the SMSF sector as I think we’ve all experienced the frustrations in rolling money from APRA (Australian Prudential Regulation Authority) [regulated] funds to self-managed super funds,” SuperConcepts technical services and education general manager Peter Burgess told delegates at the SMSF Professionals Day 2018, co-hosted by selfmanagedsuper and SuperConcepts, in Melbourne today.
“This measure is designed to streamline that because the SuperStream rules require a rollover to occur in three days, so this is a big step forward for the sector.”
According to Burgess, it is a move the SMSF sector has been pursuing for some time. Feedback on the initiative is being sought from the industry, with submissions due by 3 August. The proposed date of introduction is 30 November 2019.
He did point out though there was an element contained in the government’s 17 July announcement that may be an issue for the SMSF community.
“They’ve also announced that all types of contributions made to a self-managed super fund from 30 November 2019 will also be subject to SuperStream,” he said.
“Currently the only contribution to an SMSF that has to comply with the SuperStream rules are SG contributions made by a non-related employer. These circumstances require an SMSF to have one of those electronic services addresses for those contributions to happen.
“What they’re proposing here is that all types of contributions will require an electronic service address. So if your client is going to make a non-concessional contribution, they’re going to have to get themselves one of these electronic service addresses in order to do that.
“I’m not exactly sure how that is going to work in the SMSF sector. I think this needs a little bit more thought. Do we really want SMSF members to have to get themselves an electronic service address in order to be able to make a non-concessional contribution.”
He conceded there were some benefits associated with the move to improve the integrity of the sector, but reiterated he thought the process was unworkable.
