SMSF trustees need to be reminded rollovers out of their fund need to take place via the ATO’s SuperStream platform and the failure to use it will be considered a breach of superannuation regulations.
ASF Audits head of education Shelley Banton noted SuperStream was not being used when SMSFs were rolling money into another such retirement savings vehicle or an Australian Prudential Regulation Authority-regulated fund despite its use being a legal requirement since 1 October 2021.
“One of the things we are seeing in audit is that SuperStream is being bypassed when super funds are rolling money over, but trustees need to use it,” Banton said during a presentation hosted by ACIS yesterday.
“I know how difficult it can be, but you [as practitioners] need to use it and you need to get your trustee clients to use it, otherwise it’s going to be a breach of [Superannuation Industry (Supervision)] Regulation 6.17.
“We know trustees find it easier to use their banks to do that transfer when a member is rolling their balance over to a new SMSF, but that is going to be seen as a related-party fund and is unfortunately a breach that will be reported to the ATO because auditors have no discretion around that.
“The good news is the ATO is not currently undertaking compliance action regarding SuperStream breaches, but if we know anything about the ATO, we know that can change very quickly so getting that education and training to your clients is really important.”
She added that where an industry or retail fund made a rollover into an SMSF outside of the SuperStream system, trustees will likely not be held responsible if they had made an effort to ensure it could have been made through the correct channels.
“Rollovers from an industry or retail fund to an SMSF completed outside of SuperStream could be a reportable breach to the SMSF and the ATO depending on the reporting criteria, but it will depend on whether the fund has set themselves up for electronic transfer from a rollover point of view.
“The SMSF has to have an electronic service address to accept those contributions through SuperStream. The fact that the contribution then doesn’t come in via SuperStream isn’t the fund’s fault.
“If a contribution leaves the SMSF outside SuperStream, that’s where auditors have a problem and that breach will have to be reported if it’s passed the reportable threshold tests.”
