News

Business News

SMSF record upkeep flagged as major struggle

The maintenance and administration of SMSFs and records under the complex superannuation rules will be a significant challenge for the industry as the legislation assumes the sector operates on real-time data.

In response to a comment about a possible dilemma for accounting and administration firms to innovate around the new super changes, Crystal Wealth Partners executive director Tim Wedd said there were questions about whether software providers would be able to manage SMSF accounts, data, information and calculations to commute pensions, for example, in an efficient, real-time manner.

“The thing I do find interesting that I think hasn’t had a lot of noise made from the backroom is about what’s actually going to be involved in the steps to even write the program to be able to even do this,” Wedd said during a panel session at the 8th Annual Self-managed Independent Superannuation Funds Association (SISFA) SMSF Forum in Melbourne this month.

“And [how would you] measure the balances and track the balances, and work out whether you’re ahead or behind?

“Whether or not it’s still because they’re getting their heads around it is quite legitimate as [the superannuation bills] are only a few weeks old, but this is the bit we’re struggling with in our office – getting our heads around how are we going to really know?

“It’s fine on day one, in a sense, looking at what the circumstances are, but once we get a year or two years into this, how good is my data really? What were the account balances?

“If they weren’t up-to-date records, sorry. But if they were up to date, you would’ve been able to make a contribution.”

SISFA policy committee chair Michael Jones said new reporting would have to be written into administration software.

“There’s been a rush for getting the legislation through and if they can’t pass it before the end of the year, I think the industry would need six months to be able to implement it,” Jones said, adding the superannuation legislation assumed real-time reporting and real-time data existed in the SMSF sector.

“But we’re not there yet.

“The original motivation for having multiple pensions is still there, it’s just going to get messier from an administration perspective. And that’s the understatement.”

Copyright © SMS Magazine 2019

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital