The complexities and requirements of the superannuation changes commencing on 1 July will play a significant role in driving the SMSF sector to move closer to real-time reporting and up-to-date data, according to a technical expert.
“The new super reforms will make it harder and harder, if not impossible, for service providers that offer an annual administration service run off the back of an excel spreadsheet to survive,” Colonial First State FirstTech executive manager Craig Day told selfmanagedsuper.
“Moving into a total super balance and transfer balance cap world, I think clients will want and will demand real-time reporting.
“They won’t want to wait six months until after the fund’s annual member statements have been completed to know whether they can make a non-concessional contribution or start a pension.”
Commenting on whether technology providers were stepping up to help SMSF practitioners navigate the super rules, particularly compliance, Day said he had seen evidence of this.
“From my exposure to what is happening across technology and innovation, I think they are,” he said.
At the 8th Annual Self-managed Independent Superannuation Funds Association (SISFA) SMSF Forum in Melbourne in November, Crystal Wealth Partners executive director Tim Wedd highlighted that the maintenance and administration of SMSFs and records under the complex superannuation rules will be a significant challenge, as the legislation assumed the SMSF sector operated on real-time data.
“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?” Wedd said at the time.
“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.”
In addition, 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, agreeing that the super legislation assumed real-time reporting and real-time data existed in the SMSF sector.
“But we’re not there yet.”