SMSF advice practitioners will need to ensure clients looking to make a rollover in or out of their fund are registered under the SuperStream system, which will begin to apply to SMSFs from the start of March, a technical expert has warned.
Accurium head of education Mark Ellem said while the extension of SuperStream to SMSF rollovers, and thus the need to be registered with the system, would be voluntary from 31 March, registration would become mandatory for rollovers from 1 October, even for SMSFs with retired members receiving no contributions.
“A lot of SMSFs are already in SuperStream and using it where they might have a member who works for an arm’s-length employer and are receiving contributions,” Ellem said during a recent webinar, adding those funds would already have an electronic service address (ESA).
He pointed out that with the extension of SuperStream to SMSFs for rollovers, some funds may find themselves caught short if they fail to obtain an ESA before enacting a rollover.
“Where a fund wants to receive a rollover when the SMSF is established, they will have to set up an ESA and register for SuperStream so that the rollover can be effected or where the fund is being wound up and the money is being rolled over to an Australian Prudential Regulation Authority-regulated fund,” he said.
“It might be the case that a fund may not have any ESA because the members are retired or they are not receiving contributions or they have no reason to register for SuperStream or get an ESA because they’re not receiving contributions from an unrelated employer.
“But if they wanted to wind up the fund and roll it over after 1 October 2021, the fund will have to register, get an ESA and do it via SuperStream.”
He said practitioners should run through a checklist of items before enacting a rollover and ensure that even where a fund has been set up via an administration platform, that its SuperStream details were registered and up to date.
“It is mainly practitioners that would be arranging or had arranged SuperStream registration for their funds and it is very common for that to be done through an administration platform, but ensure the SMSF has an ESA and that’s active, as well as an ABN (Australian business number) and a bank account,” he said.
“Also check with the ESA provider that they will be providing rollover SuperStream services, and from when – whether they will be part of the voluntary transitional period or just from the mandatory date of 1 October – and make sure the details are up to date with the ATO, which is going to use SuperStream with SMSFs for release authorities.”
