Issues flagged with use of external SuperStream providers
An auditor says she can see the potential for lots of problems when considering the use of an external SuperStream provider rather than one of the major superannuation software providers.
From 1 October 2021, SuperStream became mandatory for all SMSFs to roll over super to and from their funds. The new standards require a trustee to roll over or transfer an amount no later than three business days after the trustee receives the rollover or transfer request, or if the trustee requires further information, the date the trustee receives that information.
Speaking to SMSF Adviser, BDO superannuation partner Shirley Schaefer said the three-day time frame under the SuperStream standards is proving difficult for many funds.
“If an APRA fund is requesting a rollover from an SMSF, getting that done within the time frame would be impossible for nearly every SMSF, even those with the big administrators I would think, because you’ve got to collect all the information,” Ms Schaefer explained.
Ms Schaefer reminded professionals that despite the difficulties in meeting the time frames, if rollovers and release authorities occur outside of the time frames, this is a breach of the payment standards.
“One would hope it wouldn’t be a material breach of the payment standards, but there will be an expectation that auditors will be checking those time frames in 2022 audits,” she cautioned.
Ms Schaefer said SMSFs on the major super fund platforms are likely to have fewer issues with processing rollovers under the standards because of the systems and notifications they have in place.
“However, if someone has an external SuperStream provider, something like Australia Post, the trustees probably get emails from Australia Post when the information comes, but do they check it regularly and do they action it?” she questioned.
“I can see the potential for lots of problems. If you don’t have a copy of the original notification, how do you know if you’re outside the time frames? The practical application of doing that is going to be interesting when it comes down to it, particularly those who are not using mainstream superannuation software providers.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.