Aaron Dunn, CEO of Smarter SMSF, told delegates at the SMSF Association National Conference last week that it is still quite common to see the rollover process “fall over” due to a lack of understanding, information missing or incorrect details.
“The result is frustration as monies move into and from the SMSF system. Up until 1 July 2023, the ATO had temporary measures in place to authorise rollovers outside of the SuperStream system from an SMSF to an APRA fund, or another SMSF,” he said.
“However, this exemption has now ceased. Failure to comply with Division 6.5 of the SIS Act, will result in a breach of the payment standards in SISR 6.17.”
Mr Dunn said several steps must be followed to rollover a member’s benefit (partial or full) from within an SMSF, including using the SMSFmemberTICK system to validate the member’s TFN (once only), and ensuring the member has correct details with the ATO that includes any name change due to marriage.
“It is important to note that SISR 6.33D requires the mandatory use of this service,” he said.
“The other steps that need to be taken to rollover a member’s benefit are using the SVS to verify fund and member details when rolling to another SMSF, and using the Fund Validation Service (FVS) to verify the fund details when rolling to an APRA-regulated fund.”
He added the rollover via SuperStream must be made no later than three business days after receiving all the information required to process the request.
“It should be noted that there are no allowances under SuperStream laws for cancellations or amendments – an incorrect transfer simply requires an adjustment to be made – either as an additional ‘top-up’ transfer or to request rollover amount back into the SMSF,” he said.
However, there are some exclusions to SuperStream rollovers, including a superannuation splitting order under which there is no obligation for the rollover to be undertaken via SuperStream.
“The SuperStream laws contained within Division 6.5 of the SIS Regulations only apply to transactions where the member has completed a written request to rollover a benefit within the superannuation system,” Mr Dunn said.
“Any superannuation splitting amount under a family law payment is subject to the requirements of Part 7A of the SIS Regulations which deals with payments as a result of an arrangement whereby the member’s super interest is subject to a payment split under the Family Law Act 1975.”
He said more specifically, Regulation 7A.03D of the SISR provides for the non-member spouse to request a rollover or transfer of benefits and as family law superannuation split payments fall outside Division 6.5, SuperStream doesn’t need to be used for the rollover.
“In addition to the family law superannuation split being exempted by SuperStream, any decision to transfer assets in-specie from one SMSF to another is also excluded from the Division 6.5 requirements,” he added.
“However, it is still incumbent upon the super fund to provide a Rollover Benefit Statement (RBS) to the receiving fund within 30 days of the rollover payment (SISR 6.34A).”
