Ahead of a live webinar update today (10 March), Aquila Super lead SMSF audit partner Chris Levy said that 80 to 90 per cent of the time, there are no issues with rollovers through the SuperStream system.
“[However], when a particular scenario crops up, it’s a major headache and hassle. Money gets lost, transactions like purchasing a property fall over because things don’t work and it just causes grief,” said Mr Levy.
Mr Levy said that in some instances, this can also have an impact on the audit.
“To give a brief example, there might be a situation where someone has gone out and committed to buy a property that they need to settle on in a month’s time but they haven’t finished setting the fund up yet,” he said.
“They may not have had a problem in mind but then due to an issue with SuperStream, the money isn’t coming across in time. [In one instance] the trustee was going to lose a $50,000 deposit.”
In these sorts of situations, Mr Levy said trustees might be tempted to breach the rules by lending money to the super fund, for example, in order to prevent the purchase from falling through.
“We had another client who was rolling over around $1 million, and for two weeks, it got lost in the system. The accountant involved had to spend four or five hours trying to track it down across a different bunch of databases,” he said.
“In the end, it was the retail fund and some data entry person had put the wrong thing in, and the only way that it cropped up was because the ATO had a look at the connection between their database and what the retail fund was doing and found the error.
“There’s no way an accountant would be able to solve this, and yet all this grief has been put on them.”
One of the key issues with the system, Mr Levy explained, is that there are six or seven databases that all link together, and if “something isn’t right, the whole thing falls over”.
Mr Levy said that if the system was able to identify where the problem is, this would be a significant help for SMSF professionals.
“At the moment, all the poor accountant gets is an error [message] saying no we can’t transfer this money,” he said.
During the webinar, Mr Levy will also be discussing in detail the ATO’s position and requirements on valuations for property and unlisted entities, with valuations still causing hassles and slowing down the audit process.
With lodgement deadlines fast approaching, Mr Levy said he is hoping SMSF professionals can help make clients aware of the various requirements before they drop their work off.
“We want to avoid that slowdown at the end. We are close to the middle of March and the deadline is the middle of May. Crunch-time is rapidly approaching and I can just see that the stress levels of everyone is going to go up,” he said.
“…working efficiently”! Maybe rollovers to a SMSF are working but not outward, especially when winding up a fund. It was customary to make the last rollover a cheque for the “balance to close” the account. Now that SuperStream demands a $ figure, there is residual money in the super fund bank account, requiring further rollovers, then interest gets added to the account when you close it…..Arghhhh!
That combined with the requirement to use internet banking for rollouts and daily bank transfer limits, its just unworkable. Ever tried to phone a bank and talk to a real person? And the ATO has the hubris to say if the bank can’t lift its transfer limit to “change banks”! Is that their “financial advice”?.
Its a shame that Treasury, the ATO and industry were too focused on getting their SuperStream computer messaging right in one direction APRA:SMSF, without focussing on the real world practicalities of SMSF:APRA.
It would be very handy if the ATO would actually provide STP confirmation of running balances for the employer, including Super. There remains NO visibility for STP reporting data. The ATO give the lodgements, but we all know that changes can be made to prior periods and this won’t reflect. Try to balance and ensure data matches is impossible if the ATO keeps this information hidden.
My first SuperStream Rollout went the same way. The Bank didn’t use the transaction reference number, they used the member number. The funds did go to the superfund, but were not allocated to the member as quickly. It was nearly $1M and it was a very worrying time. Imagine your life savings out there in cyber space….. I know that technology is our friend, but when it goes so badly wrong, you have yourself your worst enemy possible!
When a rollover fails there needs to be a reason given We are all poking around in the dark at the moment, not sure about what needs to be fixed.
Tip of the iceberg stuff.
What about all the issues being caused by the employers poor data recording and/or delivery via clearing houses errors.
FOR EXAMPLE: I am not kidding by the way I have seen contributions coming in from the ATO (the employer) that sporadically are missing TFN links for different parts of the contributions. eg SGC comes through correctly while Salary Sacrifice is missing the TFN link of the same employee.
ANOTHER EXAMPLE: clearing house duplicate reporting of contributions, either the clearing house error or the employer somehow managing to report twice.(Try getting to the bottom of that when the employer is QLD Health!)