Rollovers no longer in members’ hands

smsf rollovers

SuperStream means SMSF members should no longer trigger their own rollovers but seek help from an SMSF practitioner or administrator

SMSF advisers and accountants need to inform their clients they can no longer make rollovers out of their funds without help from a practitioner or fund administrator to avoid breaching the SuperStream rules.

Heffron head of SMSF technical and education services Lyn Formica said many SMSF trustees were still using past rollover processes that are no longer applicable, and as they are outside the SuperStream rules are a breach of the payment standards found under Superannuation Industry (Supervision) regulation 6.17.

Speaking at the recent Heffron Superannuation Intensive Day 2022 in Sydney, Formica said Heffron has a number of clients who were used to triggering their own rollovers out of their SMSF to other funds, but they will now require help.

“It is almost impossible for them to roll over benefits from their SMSF to another fund without getting help because when rolling out the SMSF is the transferring fund and it needs to comply with SuperStream,” Formica said.

“So if we are giving a paper rollover benefit statement and a cheque to the receiving fund, then we are not compliant with the SuperStream rules.

“If we make a BPay transfer from the SMSF to the APRA (Australian Prudential Regulation Authority)-regulated fund and don’t give any data with it, not only are we breaching the SuperStream rules, we are going to have problems because the receiving fund is going to think it is a contribution.”

She noted non-SMSF practitioners may also struggle with the need to use SuperStream and gave the example of an accountant who picked up some SMSF work and planned on making a rollover at the end of the financial year.

“They attempted to roll money from an SMSF to an APRA-regulated fund and the trustee didn’t realise SuperStream existed and did a BPay from the SMSF to the APRA-regulated fund,” she said.

“When they tried to do the transaction, they could not find anything easily on the APRA-regulated fund’s website as to what the bank account details were so they used the BPay code for a voluntary contribution.

“So, apart from making a contribution to the APRA-regulated fund, there may be contribution cap issues and, depending on how the BPay came out of the SMSF, some illegal early access issues.

“It is really important our clients know now that even though they have done those transactions before, they can’t do it on their own anymore because they need the accountant or the administrator of funds to trigger the whole process by SuperStream.”

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