In a recent update, the ATO said that if an SMSF trustee does not comply with the SuperStream rules for rollovers in the SISR, approved SMSF auditors may need to report the contravention.
Amendments to the Superannuation Industry (Supervision) Regulations 1994 (SISR) to extend the operation of SuperStream to cover self-managed super funds (SMSFs) mean that SMSF trustees are required to comply with the rules in Division 6.5 of Part 6 of the SISR for any rollovers, including partial rollovers, to and from an SMSF requested from 31 March 2021. The rules will not apply to in-specie rollovers.
In broad terms, the ATO noted Division 6.5 prescribes what information needs to accompany requests for rollovers to regulated super funds. It also requires trustees to receive rollover requests electronically, validate member details, use the ATO’s electronic services to verify fund and member information, and complete rollovers within three business days.
“While the law requires SMSF trustees to comply with the SuperStream rules for any rollovers requested to and from an SMSF from 31 March 2021, the commissioner has given trustees until 1 October 2021 to transition and onboard to SuperStream,” the ATO said.
“This means we expect trustees to comply with the rules from 1 October 2021.”
To ensure consistency with this approach, the ATO said that approved SMSF auditors only need to report contraventions arising from non-compliance with the SuperStream rules to them 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.
“If a trustee fails to comply with the rules in Division 6.5, this is a contravention of the ‘payment standards’ in Part 6 of the SISR, in particular regulation 6.17,” the ATO stated.
“As regulation 6.17 is a reportable contravention, auditors will need to obtain sufficient, appropriate audit evidence to form an opinion on whether the fund has complied with the rules in Division 6.5.”
Where the SMSF is the transferring fund of a rollover, auditors must obtain evidence confirming the SMSF received the rollover request which would have come from either the member, the receiving fund or the ATO.
Auditors will also confirm the rollover was made via SuperStream (for example, a printout from the trustee’s software provider), and the rollover occurred no later than three business days after receiving all the information required to process the request.
“Where the SMSF is the receiving fund of a rollover, auditors need to obtain evidence confirming where the rollover request was received by the SMSF directly from the member, the SMSF trustee has used SuperStream to request the rollover from the transferring fund (for example, a printout from the trustee’s software provider),” the ATO explained.
“Furthermore, this includes where the rollover was allocated to the member within three business days after it was received, and all information was received to enable it to occur.
“Where a member requests a rollover to or from an SMSF on or after 1 October 2021, and an approved SMSF auditor identifies non-compliance with the rules in Division 6.5 and therefore a contravention of regulation 6.17 when conducting the annual compliance audit, they will be required to notify the fund trustee(s) in writing.
“Providing the reporting criteria is met, auditors will also report the contravention to the ATO via an ACR at Section E (Contraventions) and describe the event as a failure to comply with the SuperStream rules, and modify Part B of the SMSF Independent Auditor’s Report if the contravention is material.”
