Brace for reporting changes in five years, SMSFs told
Technical execs are warning that the regulatory environment will change again for reporting, as SMSFs are a “long way behind” APRA funds, some of which are reporting daily.
In light of the Australian Taxation Office’s announcement earlier this month that SMSFs will only need to report on a quarterly basis, and only where a member’s total balance exceeds $1 million, SMSF Association head of technical Peter Hogan warned that the long-term view is still that SMSFs, like APRA super funds, “will report on a far more regular basis”.
“It has been acknowledged that SMSFs are a long way behind in terms of the adoption of technology and administration systems and all the rest of it, and that they needed longer to get their systems up to speed,” said Mr Hogan.
APRA fund administrators, he said, are now virtually reporting on a daily basis and this includes reporting information on the total super balance and transfer balance cap transactions.
“The bottom line is that SMSFs, from a technology point of view, are a long way behind the APRA funds. The rest of the superannuation sector as well as the regulators expect them to catch up. It just won’t be in one or two years. It might be in five or six years’ time,” he said.
“The target is that perhaps 95 per cent of SMSFs within five years will actually have the technology to allow them to report on a genuine real-time basis. Whether that takes five years or 10 years, I don’t know. We’ll have to wait and see.”
Mr Hogan stressed that while the compulsory reporting regime for SMSFs doesn’t commence until 1 July 2018, and the reporting time frames are now longer, SMSF practitioners should still be closely monitoring their clients’ caps.
“Every practitioner with SMSF clients has an obligation to monitor the transfer balance cap transactions now, so make sure you keep track of them. And if your clients have a problem, then you need to act on that, because the ATO won’t tell you there’s a problem because they don’t know,” he cautioned.