Many SMSFs and advisers to the sector are ill-prepared for Stronger Super changes that will affect them, according to lawyer Philip Broderick.
“A lot of people thought [Stronger Super] was just measures for big funds and it won’t affect me,” Broderick, who sits on the technical committee of the Small Independent Superannuation Funds Association and is also a principal of Sladen Legal, said.
But while legislation such as MySuper and SuperStream, and changes to governance and reporting requirements are mainly aimed at large super funds, some incoming rules will have a significant impact on SMSFs.
For example, all superannuation funds, including SMSFs, must electronically receive contributions from medium to large employers with more than 20 staff members from 1 July 2014. The data must be transferred using prescribed standards, including electronic messages.
It means SMSFs with members who are employed by medium to large organisations will have to ensure their systems are able to electronically receive superannuation guarantee payments in the specified data format from that date.
“That’s what is really going to catch employers and SMSFs … there are trustees that have good advisers and advisers who are very proactive and make sure their client trustees are well informed, and I would expect those are on top of it, but there would be many people who are not on top of it,” Broderick said.
SMSFs that used accounting software or clearing houses to administer payments should be equipped to deal with the changes, he said, but those that had less formal systems would struggle to comply with the incoming standards.
The data and electronic processing requirements will be extended to employers with fewer than 20 staff members from 1 July 2015, meaning SMSFs with members who receive super guarantee payments from smaller businesses will also have to ensure their systems comply.
Additionally, it is expected electronic standards will be extended to cover rollovers between funds – including payments from a pooled superannuation fund to a newly established SMSF – from 1 July 2015.
Related-party employers, such as businesses where the directors of the company are also trustees of the super fund, are excluded from the changes.