ATO, Pensions

TBAR hampered by lack of real-time data

real-time data transfer balance

The lack of real-time data from the ATO about the transfer balance account is hampering the ability of SMSFs to manage pension transfers.

The lack of real-time data from the ATO about the transfer balance account (TBA) is hampering the ability of SMSFs to manage pension transfers, according to an SMSF specialist.

SMSF Alliance practice principal David Busoli said there had been much misunderstanding and significant errors in processing around TBAs on the accounting and administration side, but also by the ATO, due to incomplete data.

“The major issue is the time delay between when things happen and the ATO is advised because we have an intrinsic problem with SMSFs where we do not know on a daily basis everything that happens unless we are specifically concentrating on it,” Busoli said as part of a presentation at the Chartered Accountants Australia and New Zealand 2019 National SMSF Conference in Sydney today.

He pointed out the Australian Prudential Regulation Authority’s involvement in on-time reporting for the funds under its oversight put additional pressure on the SMSF sector to ensure it does not create a position where a TBA breach is reported.

“I have a real problem with the whole area of TBA because we don’t have visibility over the ATO’s data. We can get it from MyGov, but we don’t have any way of doing this in bulk at the present time,” he said.

“We won’t know what the problems may be until we look at them, but how many advisers will take a proactive look and enter into each one of their clients’ accounts and see if they are okay?

“What do we know is this: because of the significant number of difficulties with double counting and reporting, incorrect reporting on the part of accountants and administrators and the ATO, a number of funds have received breach notices that were incorrect.

“My concern is how many have incorrect data from TBA records that we don’t know about because the data is not incorrect enough to show a breach.

“This is a big one because a lot of time bombs are sitting in there and will pop out in coming years.”

He said due to the lack of real-time data, the ATO – which also wants real-time reporting – has given specific concessions in considering TBA issues and recognises many funds are unsure what their TBA and total super balance are at the end of the financial year.

“It depends on what stage of the year they started their pension and what funds someone is a member of and what fund they are reporting, and so we can expect the ATO to be lenient in this regard because it is confusing,” he noted.

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