Blockchain could potentially act as the underpinning technology for SMSFs and superannuation funds more broadly to consolidate the sectors and reduce costs, according to an SMSF specialist.
Addressing delegates at the SMSF Association National Conference 2018 in Sydney on Wednesday, BT Financial Group SMSF national manager Neil Sparks said using blockchain technology could aid in consolidating the super system, which currently used multiple levels of different technologies to work in sync and deliver processes.
“This will see the stripping out of those layers of technology, which of course leads to reduced costs. We expect improved service for clients and increased client engagement as a direct result of the blockchain and new products and investment features it can deliver,” Sparks said.
“I’m not proposing nationalising superannuation by any stretch of the imagination, but you could very well see blockchain is the underpinning technology for super and all clients basically appoint different users to service their super fund.”
In the SMSF space, Sparks proposed that after appointing the ATO as the regulator, the member would then appoint their trustee company to be the trustee of the fund, and then appoint their professional service providers.
The accountant or specialist administrator would perform the administrative duties.
“But all of that account history remains intact in your one blockchain super fund,” Sparks said.
He listed possible benefits as no pension deeming issues when moving a client from one superannuation administrator to another, and the ability to track contribution cap amounts since all the data would be available in the one place.
“As an example, you have one super fund for the rest of your life, which means we never have to roll over money. We don’t have to have delays with rolling over money. When you want a total superannuation balance you’d b able to get it because it’s all there in the one fund,” he said.
