SuperStream has reversed the process of conducting a rollover and pushed all the compliance requirements onto the transferring fund, leading to the teething problems it is experiencing, according to an audit firm.
ASF Audits head of education Shelley Banton said: “The days of rolling over money from one SMSF to another and filling in the paperwork later are long gone. SuperStream has reverse-engineered this process, with all the work done upfront and the rollover as the final step.”
In a blog posted to the ASF Audits website, Banton noted this pushed the compliance impact of SuperStream onto the transferring fund and these new compliance requirements were hard to meet in some cases.
She noted that to conduct a SuperStream rollover, SMSF trustees now had to validate all fund and member data, rely on bank transfer limits, which were often below the rollover amount, and set up an electronic service address for rollovers and contributions.
“The transferring fund must understand that SuperStream has two separately moving parts: data verification and electronic bank transfer within the required timeframe,” she said.
“While the receiving fund must be able to accept an electronic rollover, the obligation is with the transferring fund to undertake the rollover electronically.
“Not complying with SuperStream breaches the payment standards and penalties may apply, but it is the transferring fund in the compliance firing line, not the receiving fund.”
She noted that where errors occur in the SuperStream rollover process, an SMSF will receive an error message informing it the rollover has been rejected, but with no details as to what caused the rejection.
“It is up to the SMSF trustees to start the SuperStream process again by verifying and validating fund or member data with the ATO, making the rollover in accordance with the rollover request and the required [three-day] timeframe,” she said.
She added that while SuperStream had changed the nature of the rollover process, SMSF trustees were unlikely to be penalised for errors for the moment.
“With SuperStream still in its infancy, the ATO will most likely adopt an educative approach in the first year to avoid applying mass penalties to SMSFs, especially where the breach is out of their control,” she said.
“While the receiving fund will not face any compliance issues, the ATO will continue to monitor industry behaviour and reassess its compliance position where necessary.”
