Blockchain tipped to eliminate rollovers, cut costs in super
Underpinning superannuation with blockchain technology has the potential to eliminate the need for rollovers and create a smoother process for implementing new legislative change in the future, says BT.
Speaking at the SMSF Association National Conference, BT national manager for SMSF Neil Sparks said there was a lot of potential with blockchain for superannuation in terms of stripping out layers of technology and costs.
Blockchain could allow all super members to have one super fund for the rest of their life, where they simply appoint different users to service their super fund, he explained.
“[For example], if you started off with an industry super fund, you could appoint [that provider] as your trustee, administrator and investment manager of your super. If you wanted to have external retail insurance, you’d be able to appoint a retail insurance provider to your super fund as well,” Mr Sparks explained.
“If you wanted to then progress into a retail super product later on like a wrap for example, you would be able to remove the existing administrators and appoint new administrators to your fund and then appoint your professional service providers whether that’s a financial adviser, a stockbroker, an insurance agent and so on.”
This could be taken a step further for SMSF trustees, he said, where members would be able to replace APRA as the regulator and appoint the ATO instead, and appoint their trustee company to be the trustee of the SMSF.
“They could then appoint professional services providers such as a financial adviser, accountant, specialist administrator to the admin, actuaries and so forth - all just by granting permission to the blockchain, but all of the account information would be in tact inside your on blockchain super fund,” Mr Sparks said.
Mr Sparks said there would be immense benefits with this such as never having to roll over money and the losing tax deduction capability because the client was rolled over to another super fund.
“When you need to know the total superannuation balance, you’d be able to get it because it’s all there in the one fund. When it comes to contribution caps, you’d be able to tell exactly where you’re at because the contribution is there in your super fund, and there’d potentially be no pension deeming issues where you want to move a client from one administrator to another,” he said.
“When it comes to legislative change from the regulators, instead of every single super fund going out there and spending tens, if not hundreds of millions of dollars to comply with the new rules, the super fund blockchain would be able to do that.”