SuperStream still a ‘work in progress’

One of the key issues with the system is that there is limited information provided where errors occur, said the report.

“The ATO has built extra web services such as SMSF Member Tick and SMSF Verification Services (SVS) to validate member and fund information. But for privacy reasons, it won’t tell you the proper error messages if things go wrong,” Class stated in the report.

“This is particularly problematic for tax agents for SMSF only, as often they do not have the authority to act on behalf of members in dealing with the ATO or the APRA fund.”

It also noted that a lack of transparency with APRA funds and delaying tactics make it difficult to conduct a rollout from their funds into SMSFs.

The fact that some banks do not support a description of more than 16 characters, which is the length of a unique payment reference number, is also a problem it said.

Commenting with the report, Supervision Group senior SMSF client manager Chris Homer said in some cases it can be difficult for SMSFs to comply with the deadlines.

“Even firms that have implemented continual processing will struggle to move a member’s balance within three days. If a trustee jumps the gun and requests the receiving fund to initiate a roll-in (from an SMSF to an industry/retail fund), they may be unaware of the conditions that a firm requires,” said Mr Homer.

“Cash requirements, online banking limits, processing times, documentation and valuations etc, make it difficult to close out a member’s balance within that timeframe. The variables increase if a wind-up is also needed. As a result, companies in the SMSF accounting space need to educate their clients on the process.”

Mr Homer said it may be helpful to establish an additional protocol to define the initiation.

“Currently, rollover requests can be initiated by either side of the process but we suggest the receiving super fund should take responsibility for it. This makes the timeframe of three days redundant. New rules, such as this, will provide greater clarity and further define responsibility,” he explained.

Overall, Mr Homer said SuperStream is as work in progress rather than a finished product.

“We feel the implementation for rollovers was rushed, and the process underdeveloped. All participants, including our team, were unaware of the data that needed to be recorded in multiple places for a rollover to work,” he said.

“The reasons for rejecting rollovers were not fully understood, nor were the teams of large industry and retail funds aware of what was required to fix the rejections or any breakdown in the system. Ultimately, it felt as if the creators of the rollover scheme were disconnected from the users, which led to much confusion.”

While SuperStream rollovers are still hit and miss at the moment, Mr Homer believes improvements and efficiencies will increase over time.

“We believe that the collective experience of all users will improve the efficacy of the system. Minor adjustments will always be required, but by cooperating, we are confident the experience will continue to improve,” he said.

He also noted that once ID verification is automated, the last manual process will be removed, which will also help boost the efficiency of the system.