Superstream and SMSFs

I have been trying to draw attention to this "reform" by the Government and ATO that threatens to stop rollovers and employer contributions into SMSFs from July 2013.

I have blogged my research on the topic here

The SMSF industry has not caught up with this one and it threatens to make it very difficult for the average SMSF

What do others know about this topic ?

 

Hi Phacoboy

Welcome to the forums - this is my first post in a while - so I feel new here too!

You are correct in saying that this topic and how it applies to SMSFs has not widely been discussed.

I do not think it is the intention of the reforms to prevent rollovers to SMSFs, however the ATO and Treasury are trying to gain greater control over money going to SMSFs and trying to reduce illegal early access and fraud. You could even stretch that a little further and say the current Fed Government doesn't like SMSFs at all and want all the money going into their friends at the Industry funds.....but you didn't say that

We have already seen the implementation of the members register which enables an APRA fund to check a member is listed as a member of a SMSF before transferring the money which is a good safeguard whe the APRA funds bother to use it.

The Superstream implementation of requiring a receiving fund to utilise software with XBRL capabilities to receive rollover and contribution information may catch some unaware over the next few years.

Speaking on behalf of the SMSF industry you can relax. I know the software company I work with very closely already is testing this functionality and will release it over the coming months. No doubt the other mayor SMSF software companies will be doing the same.

I like the idea of my software automatically recieving what I would deem as an electronic remittance advice (for contributions) and an electronic copy of a rollover statement. It already receives bank transactions, share trades, dividend notices, distribution notices and other information - so the next logical step would be contributions and rollovers reported in a standardised format.

I am also supportive of anything that can speed up the process of a SMSF receiving rollovers from industry and retail funds quicker. Too often they drag it out, although it has become better in recent years as they need to pay rollovers within 28 days.

However it may catch out the pure DIYers who use non specialist software packages to administer their SMSFs. Closer to the Superstream provisions becoming live, no doubt we will see a handful of third party programs or apps entering the market to plug this hole, including parties acting as clearing houses for contributions and rollovers on behalf of SMSFs.

In regards to having one bank account per fund, I don't read it that way. I believe there will be one nominated account per individual member, in a SMSF it could be the same for all members or each could nominate a different account.

Reading the information again, it also looks like from July 2013 rollover requests from SMSFs to APRA funds will need to be via the new standards i.e. electronically - however I would imagine that APRA funds will make their own rules around exactly how it happens and still likely have to indentifying the person making the request via paper forms and ID being provided. I have to research this however.....just musing at this stage......

I think the impact in the short term for SMSFs is that the accountants, administrators and trustees who look after the funds will be forced to use software that has been updated / developed with the new requirements in mind, and this means web based software platforms. This is a little scary considering that the dominant market player (BGL) has not yet released their web based Simple Fund.

This also means if a SMSF trustee is doing the true DIY thing and preparing their own accounts using non-specialist software, then they may be in trouble for a while until third party apps / intermediaries enter the market. It may even push them onto the software of the 'big players' - no doubt the rebellious types who fall into this category will be crying foul. They may be right....it probably isn't fair, but then again life isn't fair sometimes.

Thank you for bringing this up, it has been on my list to write about for a while, but there are never enough hours in the day!

SM

 

ATO has put together a rather dry YouTube video here about SuperStream:



Post on the ATO website specifically relating to SMSFs:

Source: SMSFs - a new standard for rollovers and contributions

To reiterate my previous comments, I know the SMSF admin software used by my business and also another major SMSF admin software provider have already done work (to varying degrees) and are SuperStream ready.

That said it does concern me that there doesn't seem to be any intermediary providers who are looking to fill the gap between die hard DIYers battling with excel spreadsheets and the large SMSF admin software companies.

SM

 

Superstream

Superstream sounds like a pain for SMSFs.

Do all SMSFs have to have "Superstream" ability starting July 2013? eg our SMSF which only pays a pension to each member? Can it simply pay the pensions and administration expenses without Superstream?

Davewa

 

Hi Dave,

You will escape the impact of Super Stream if you fund is no longer going to be receiving contributions from employers or receiving rollovers from APRA funds.

All in the name of streamlining everything for all - including SMSFs

Progression always has a cost.

SM