The move by the ATO towards real-time reporting by the superannuation industry will inevitably include SMSFs in the future and trustees need to adapt in order to meet changes to fund regulation requirements, according to an SMSF expert.
SuperConcepts SMSF technical and strategic solutions executive manager Philip La Greca said the inclusion of small businesses in the single touch payroll (STP) reporting cycle signalled a need for the SMSF sector to move towards real-time reporting.
“As part of the push for integrity and accuracy for the wider superannuation system, somehow SMSFs will need to be brought into the fold,” La Greca said in a blog post on the SuperConcepts website.
“This can either be by a blanket requirement for more frequent electronic reporting to the ATO (probably via the SuperStream gateways) or a more targeted approach where electronic reporting becomes a mandatory requirement of any superannuation fund wishing to accept superannuation guarantee (SG) contributions or pay a retirement income stream.”
He highlighted the need for trustees and advisers to ensure “future–proofed support” was in place for their funds in order to meet regulatory needs.
“This involves a combination of software with automation and data feeds, and administration capabilities that allow real-time reporting to the ATO for when the spotlight is eventually turned to the SMSF sector,” he said.
“Either way, the days of annual reporting in arrears seem numbered as SMSFs will need to advance towards providing reporting mechanisms in line with ATO requirements.”
In a recent presentation to the Australian Institute of Superannuation Trustees, ATO superannuation and employer obligations deputy commissioner James O’Halloran said the SMSF regulator would be contacting employers that appeared to have paid their SG contributions late during 2018/19.
“It should be noted this is the first direct use of the STP reporting arrangements, based on what your funds report to us relating to SG payments. It’s a tangible action which demonstrates our increasing ability to effectively follow up in relative real-time apparent late or non-payment of SG,” O’Halloran said.
In response to his comments, La Greca pointed out that until SMSFs were included in the move towards real-time reporting by the ATO, it was likely to have an adverse impact on employers.
“Employers will be put between a rock and hard place because they’ve made the contribution to an SMSF, but there’s no matching information at the ATO of the contribution being received by a fund. And this could trigger additional work for the employer in having to respond when they have actually met their SG obligation,” he added.