Extending the operation of SuperStream to SMSF rollovers will inflate costs for Australian Prudential Regulation Authority (APRA)-regulated funds, with little or no cost burden falling on the SMSF sector, according to an industry body.
The Association of Superannuation Funds of Australia’s (ASFA) submission to Treasury on extending the use of SuperStream to rollovers to and from SMSFs argued APRA-regulated funds have already had to bear the burden of costs arising from the implementation costs.
“ASFA notes that the ‘SuperStream Benefits Report 2017’ estimates that the total cost of implementing SuperStream was $1.5 billion over 2012-18,” the submission said.
“APRA-regulated funds have borne the brunt of these costs, approximately $900 million, with employers outlaying approximately $600 million.”
ASFA suggested during this regulatory reform process targeted at SMSFs, the government should review the levies and charges SMSFs pay and ensure SMSFs share the cost of SuperStream services.
The superannuation industry peak body also warned of the risk of potential fraud associated with extending rollover services to SMSFs and called for the draft regulations to include appropriate security measures, particularly relating to validating bank account details for the rollover of money from APRA funds to SMSFs.
“To protect the best interests of superannuation fund members, the question of liability also needs to be clarified in the event that incorrect or fraudulent bank account details are provided to the trustee from this mandatory service which the trustee relies on,” the submission said.
“Superannuation fund trustees and/or their members should not be liable for any loss in these circumstances and the verification of bank accounts should be mandatory before any SuperStream rollover to an SMSF can occur.”
