Technical Update:

Super Alert - How are Rollovers to and from SMSFs set to change?

28 August 2018

Betty Wu, Manager, Superannuation |

On 17 July 2018, Treasury released exposure draft regulations proposing to change the way rollovers to and from self-managed superannuation funds (SMSFs) are handled. It is proposed that from 30 November 2019, all rollovers that are requested on or after that day must be transferred electronically using SuperStream.

Benefits of electronic rollovers

The Minister for Revenue and Financial Services, Hon Kelly O’Dwyer MP, concluded in a Media Release dated 17 July 2018 that the benefits of processing rollovers electronically include:

  • Reducing compliance costs of SMSF and APRA trustees by current manual, paper-based processes
  • Expediting rollovers between APRA funds and SMSFs (which can currently take months to action)
  • Improving the integrity of the superannuation system.

Requirements for compliance

The proposed regulations require all superannuation entities, including SMSFs, to provide the Commissioner of Taxation with:

  • A unique superannuation identifier (which is likely to be their ABN)
  • Bank details of accounts that can receive electronic payments
  • An internet protocol (IP) address or other digital address approved by the Commissioner that can facilitate SuperStream communication, for contributions, rollovers or transfers that happen on or after 30 November 2019 or at least 10 business days before.

Acquiring an IP address

Not all SMSFs currently have an IP address, which may be obtained from an independent SMSF messaging provider or through their existing SMSF administration platforms (e.g. CLASS Super, SuperMate, BGL). The amendments will mean that all SMSFs receiving contributions, rollovers or transfers on or after 30 November 2019 must have an IP address, regardless of whether an exemption applies. For example, an SMSF may be required to obtain an IP address even though it is receiving only contributions from members, and therefore, not required to use SuperStream. Members and SMSF trustees should check with their fund administrators as certain SMSF administration service providers offer the SuperStream services free of charge.

Effect on SMSFs with no contributions or related-party contributions

Whilst SMSFs must use SuperStream to receive employer contributions and associated data electronically, SuperStream does not apply to situations where an SMSF receives no contribution or only contributions from a related-party (including both employer and personal contributions). SMSFs are not required to use SuperStream to transfer benefit payments between funds under the current system.

Need Help?

This reform is yet another rush by the Government for real-time and event-based reporting, further highlighting the importance of a good SMSF administration software that enables the daily electronic flow of data and daily reconciliation of accounts. Consultation on the exposure draft, Treasury Laws Amendment (2018 Measures No. #) Regulations 2018 ended on 3 August 2018.

Members and trustees are encouraged to contact the BDO Superannuation team to discuss how data feeds would work for their SMSFs in meeting the real-time reporting requirements. If you require assistance, please contact your local adviser.

Disclaimer: Please be advised that the information contained in this article is purely factual in nature and does not take into account your personal objectives, financial situation or needs. The information is objectively ascertainable and, therefore, does not constitute financial product advice. If you require personal advice that takes into account of your particular objective, financial situation or needs, you should consult BDO in our licensed capacity.