From 1 October this year, 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 received the rollover or transfer request or if the trustee requires further information, the date the trustee receives that information.
BGL head of the Simple Fund 360 product Matt Crofts said complying with the three-business-day time frame has been a challenge for SMSF trustees and APRA-regulated funds as well, with a straw poll undertaken by BGL revealing that the majority of rollovers are currently not meeting the three-business-day turnaround.
“We just did a straw poll and we know that there are only around 20 per cent meeting that three-day turnaround at the moment. There’s been some good ones that have turned around in 48 hours which is fantastic but […] looking at the data, the vast majority, around 40 to 50 per cent, are coming through within a seven-day time frame,” said Mr Crofts in a recent SMSF Adviser Show podcast.
“I think as we get used to the system and used to the new process, I think that’ll improve.”
Mr Crofts also stressed that if the trustee doesn’t have all the information, then they only need to respond back within the three days.
“You might be missing information so as long as you’re communicating back and forth with the APRA fund, if its APRA or SMSF, if its SMSF to SMSF, then as long as you’re reaching out and making contact, that [meets] the strict definition of three days,” he explained.
He also highlighted the importance of having automated feeds with bank and wrap services in trying to meet the three-day time frame.
“You’re going to have a greater chance of being able to meet that requirement because you’ve got all the transactions there, so even if you don’t have all the information, it’s going to be a quicker turnaround [than] if you haven’t got any bank statements in front of you and you’ve got to scramble to get all that information,” he said.
He also stressed the importance of accountants and advisers communicating with each other through the process.
“If you’ve got a planner involved in the process, make them aware of what the software needs,” said Mr Crofts.
“[For example], one of the issues when you roll across to an APRA fund is that you’ve got to have the correct USI, the identifier for the APRA fund, so you may need to give them a checklist or give them access to the software.
“It’s also communicating to the trustee that if they’re going to get any queries from the APRA fund or from the accountant [that they need] to properly communicate that.”
then you need to wonder how a SMSF bank account will be able to transfer say $500,000 or $1.700,000 to another fund in one transaction – the banks just wont allow it
[quote=Anonymous]Change has occurred. Adapt or move on. Stop whining, its getting embarrassing [/quote]
I think you are missing the point. Legislation is never designed for you to decide whether or not it applies to you. Like you, I also don’t have the slightest issue as my affairs are very simple being a single member. But legislation is usually written for the worst case scenario. And quite often worst case scenario laws also somehow burden those who don’t have issues. So when I wrote my comment, I was thinking of everyone, not just myself. Just consider a six member fund where the kids, who might not be thinking rationally, decide to tell mum and dad they want out – NOW! Or as someone else mentioned in these comments. Marriage breaks up. I want out – NOW! Rationality goes out the window. Hence the need for legislation. But the legislation needs to be able to work under a worst case scenario. And a 3 day rollover will never work in a worst case scenario. It might be impossible for your fund to be compromised in this way, but please consider the thousands of others who each have their own specific circumstances.
The trustees/member’s choices put them in this position. Do not add your irrational children to the SMSF. Do not get married to irrational people and if you do, don’t add them to the SMSF. As trustee, they have the responsibility to make the right decisions.
Perfectly normal people become irrational following a falling out.
My spouse wasn’t irrational when I married………only when I divorced. Funny about that.
If there is a property in there, or units in a related trust with multiple properties, try getting a valuation done in 3 days…..
Trustees of SMSFs should be contacting their accountant to discuss what needs to occur before requesting a rollover. Its not that hard…
It’s not a challenge to rollover in 3 days, it’s impossible. SMSFdo not hold assets as cash. To divest shares, get funds and do the transfer takes at least 6 business days. I’ve emailed Senator Hume many times and I’m being ignored. Can someone more powerful have a go?
Its very simple. Trustees need to be educated. If a trustee is planning on rolling out their balance, they should liquidate their assets, provide the relevant information to their accountant and then wait for the accountant to update the SMSF records. Once updated, the trustee makes the request to rollover their balance. Should easily be completed in less than 3 days.
Unless you have an unpleasant marriage breakdown, a falling out between business partners, or a family rift where the leaving member actively wants to cause an issue and requests a roll out knowing that the remaining trustees can’t action it in time.
In all these examples, the member would have had to wait for enough liquid cash to be rolled out. If the member requests a rollout to cause issues and raise a fine, the fine will reduce their balance too. The member needs to be educated that it will be detrimental to them too.
Of course you do it this way. However the law is written under the assumption that a rift or disagreement may have developed with a member. Laws also do not acknowledge when decisions are made in the fund that the member and trustee is the same person. The law should be doable as written. What’s the point of having to do a work around to make it work and avoid heavy fines?
Its not a work around. It is the way. Members need to be educated that if they do this a fine will be imposed on them too.
Change has occurred. Adapt or move on. Stop whining, its getting embarrassing
Detrimental or poorly thought out changes should be complained about. It’s not embarrassing. It’s getting your voice heard.
Seems a little bizarre that a trustee/member can be penalised for taking more than 3 days to roll THEIR own money from THEIR own fund into another account in THEIR name. One wonders what is the actual benefit of all this bureaucratic garbage.
Even with bank and wrap feeds, it is difficult to have all the info available at that moment. Quite a lot of SMSFs will have a bank account that doesn’t feed, or an unlisted asset that is impossible to value. Often it can take 6 months or more to get the info for year end accounts. Mid year is even worse. The ATO/whoever is coming up with this nonsense need to get a reality check.
E. When did you ever think the bureaucratic muppets that come up with this stuff have EVER had any sense of reality?
They never consult or issue white papers anymore. They just issue edicts from their secure public service desks paid for by people who actually do the work and understand reality.