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  • SuperStream SMSF rollovers and auditor reporting obligations

    When to report contraventions of the SuperStream rollover rules and what evidence you need.

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    SuperStream rollover rules

    Trustees of self-managed super funds (SMSFs) must comply with the SuperStream rules in Division 6.5 of the Superannuation Industry (Supervision) Regulations 1994 (SISR) for rollovers.

    This includes partial rollovers to and from an SMSF requested from 31 March 2021.Certain exceptions apply, including:

    • in-specie rollovers
    • transfers from foreign super funds
    • contributions splitting super benefits that are rolled over.

    Different rules apply to the trustee of a transferring or receiving SMSF in a rollover transaction. For example, trustees of transferring funds must ensure the:

    • SMSF is able to receive the rollover information electronically where the rollover request is from the receiving fund or the ATO (regulation 6.33B)
    • SMSF verifies certain fund/member details via the ATO’s electronic services for rollovers between SMSFs, where applicable (regulation 6.33E)
    • SMSF validates the member's tax file number using the SMSFmemberTICK service for rollovers out of the fund, where applicable (regulation 6.33D)
    • SMSF makes the rollover in accordance with the rollover request and includes a payment reference number (PRN) (regulation 6.34)
    • rollover occurs no later than 3 business days after all information needed to process the request is received (regulation 6.34A)
    • SMSF provides the rollover information (including the PRN) to the receiving fund on the same day the rollover is made (regulation 6.34B). The rollover payment and information must match.

    Trustees of receiving funds must ensure that:

    • where the rollover request was received by the SMSF directly from the member, the SMSF uses SuperStream to request the rollover from the transferring fund (regulation 6.33A)
    • where the rollover was made by the transferring fund to the receiving fund using SuperStream, the receiving fund is able to receive the rollover information and payment electronically (regulation 6.34C)
    • the rollover is allocated to the member within 3 business days after it is received and all information is received to enable it to occur (regulation 6.34D).

    If a trustee fails to comply with the Division 6.5 rules, this is a contravention of ‘payment standards’ in Part 6 of the SISR, in particular regulation 6.17.

    Reporting contraventions

    While the law requires compliance with the SuperStream rules for certain rollovers requested to and from an SMSF from 31 March 2021, we allowed a transition period until 1 October 2021.

    This means you only need to report contraventions for non-compliance with the SuperStream rules to us via an Auditor/actuary contravention report (ACR) if:

    • the rollover is requested on or after 1 October 2021, and
    • the contravention meets the ACR reporting criteria.

    When conducting the annual compliance audit, if you identify non-compliance with the Division 6.5 rules and a contravention of regulation 6.17 for a rollover requested on or after 1 October 2021, you must:

    • notify the fund trustee(s) in writing
    • report the contravention to us via an ACR at Section E (Contraventions) provided the reporting criteria is met, and
      • describe the event as a failure to comply with the SuperStream rules for rollovers
      • provide the reason why
       
    • modify Part B of the SMSF Independent Auditor’s Report if the contravention is material.

    ACR reporting and audit evidence

    A breach of regulation 6.17 is a reportable contravention. This means you need sufficient appropriate audit evidence to form an opinion on whether the fund has complied with SuperStream rules in Division 6.5.

    While non-compliance with any of the SuperStream rules is a contravention of regulation 6.17, we do not expect you to report all contraventions for ACR purposes.

    Where the SMSF is the transferring fund, you must obtain evidence confirming:

    • The SMSF received the rollover request, which may have come from the member, receiving fund or ATO (if a member makes a request via our Online services which generates an electronic portability form to the fund). Evidence could include a
      • copy of the member's rollover request
      • printout of the 'initiate rollover request' (or equivalent) message from the receiving fund's SMSF messaging provider.
       
    • The rollover was paid and information was given to the receiving fund via SuperStream. Evidence could include
      • bank account and transaction details
      • a printout of the 'rollover transaction request' (or equivalent) message from the transferring fund’s SMSF messaging provider.
       
    • The rollover occurred no later than 3 business days after receiving the rollover request and if applicable, any additional information required to process the request. Evidence could include
      • rollover request details
      • bank account and transaction details
      • additional information requested and provided.
       

    Where the SMSF is the receiving fund, you need to obtain evidence confirming:

    • Where the rollover request was received by the SMSF directly from the member, the SMSF used SuperStream to request the rollover from the transferring fund. Evidence could include a
      • printout of the 'initiate rollover request' (or equivalent) message from the receiving fund's SMSF messaging provider.
       
    • The rollover was allocated to the member within 3 business days after the fund received the rollover payment and the message containing all the information required to enable it to occur. Evidence could include
      • bank/member account and transaction details
      • a printout of the 'rollover transaction request' (or equivalent) message from the transferring fund's SMSF messaging provider.
       

    Obtaining an electronic service address

    Trustees need to obtain an electronic service address (ESA) from an SMSF messaging provider with SuperStream rollover services. This allows trustees to:

    • comply with the SuperStream rules in Division 6.5 of the SISR
    • send rollover data electronically between funds via SuperStream.

    Trustees of transferring funds must:

    • Send certain details to the receiving fund using a 'rollover transaction request' message to comply with regulation 6.34B of the SISR.
    • Be able to receive rollover information electronically from a receiving fund via an 'initiate rollover response' message to comply with regulation 6.33B of the SISR.
    • Use the ATO’s electronic services to verify certain fund details, including the ESA, to comply with regulation 6.33E of the SISR.

    Trustees of receiving funds must:

    • Send certain details to the transferring fund using an 'initiate rollover response' message to comply with regulation 6.33A of the SISR, if they receive a rollover request from the member.
    • Be able to receive rollover information electronically from a transferring fund via a 'rollover transaction request' message to comply with regulation 6.34C of the SISR.

    If a trustee fails to comply with these obligations because a fund does not have an ESA, this is a contravention of regulation 6.17 of the SISR. You may need to report the contravention to us and the trustees if the temporary measure for issues obtaining an ESA does not apply.

    Trustees must also give us their ESA for inclusion in the SuperStream register to comply with section 34Z of the Superannuation Industry (Supervision) Act 1993. Failure to comply with this obligation is an offence of strict liability. You:

    • need to notify the fund trustee(s) in writing
    • can report the contravention to us via an ACR at Section G (Other regulatory information).

    Issues obtaining an ESA

    Some trustees have experienced issues obtaining an ESA from an SMSF messaging provider that offers services to:

    • make a rollover from their SMSF
    • receive a rollover from another SMSF.

    For trustees who have attempted to obtain an ESA but had issues doing so, we are approving the paper process for SMSF rollovers in limited circumstances. This is a temporary measure put in place in the 2021–22 income year to help facilitate rollovers. It only applies to rollovers from an SMSF and between SMSFs.

    Where a trustee has approval to make a rollover outside of SuperStream using the paper process, you do not need to report a contravention. Trustees must provide you with the reference number for approval.

    If a trustee uses the paper process without our approval, you need to report a contravention of regulation 6.17. Find out from the trustees why this occurred and include this when lodging an ACR.

    Keep up to date with SMSF news and alerts. For a monthly wrap-up of news and updates, subscribe to SMSF newsExternal Link.

    Last modified: 05 Sep 2022QC 70324