Superstream Rollover Dangers
Superstream Audit Dangers!
Among the myriad of changes that occur each financial year, some get a huge amount of attention (I’m looking at you LMITO), others seem to sneak by without a whimper.
The requirement from 1st July 2023 that *all* rollovers in and out of funds must go via Superstream falls into the whimper category. Possibly because of the fact that most SMSF Accountants don’t deal with a huge number of rollovers, or the expectation that it was already mandatory to use Superstream.
I’ve audited a few ‘less current’ funds lately, with rollovers pre October 2021 (the magic date for ‘most’ rollovers needing to be through Superstream), which has led me to advise my clients of the need to have a good process for processing rollovers, especially where they are the instigating fund.
Why? Auditors must form an opinion on compliance with Reg 6.17 (which, reading between the lines, is an opinion on all of Division 6.5 of the SIS Regulations). In bullet point it requires:
*A rollover request from member or receiving fund (this can be the same thing as bullet point 2)
*The Superstream confirmation of request from the receiving fund to the transferring fund (SMSF)
*Evidence of the date they supplied you with the information necessary to perform the rollover (should all come in via Superstream from the receiving fund)
*Evidence the rollover was actioned within three days of receipt of this information (bank account transaction showing rollover out is fine)
3 days.
Failure to do it correctly? Based on the ATO’s 7 tests, it’s an automatic Breach and Auditor Contravention Report. Given most rollovers will be over $30000 (or 5% of the fund), it’s close enough to mandatory reporting as possible.
The take homes?
1. Anyone processing SMSFs should have a process in place that is easily accessible for staff (maybe the staff who deal with TBAR reporting can be trained).
2. There is no discretion for auditors to exercise professional judgement to not report this.
https://www.ato.gov.au/Forms/Auditor-actuary-contravention-report-instructions/ link to ATO’s 7 point system for deciding on an ACR.