The ATO is urging SMSF trustees who have not taken the necessary steps to make their funds SuperStream ready to receive contributions from medium to large employers to do so before this year’s 30 June deadline.
The regulator estimated around 60 per cent of SMSFs had already made the necessary preparations to receive member contributions under the new system, but wanted the remaining 40 per cent to complete the task as well.
The ATO said it suspected some of the funds that were not SuperStream compliant had already taken steps towards becoming compliant, but had just not completed the entire process.
“There might be some self-managed super funds that have already got a bank account, already have an ABN (Australian business number) and an electronic service address (ESA), but may not have passed that information onto the employer. So one of the messages we’re trying to get out there is a reminder that just because you’ve got an ESA, it’s not going to work unless you tell the employer what it is,” ATO risks and product director Nathan Burgess told selfmanagedsuper.
The ATO also wanted to alert SMSF trustees about the consequences of not becoming SuperStream compliant by the June 30 deadline in light of how important the concept of control was to most of them.
“If you need to have an electronic service address and a bank account and an ABN and you don’t tell your employer after 1 July, it will kick off a process that will eventually see your contributions not go into your self-managed super fund, but go to the employer’s default fund instead,” Burgess said.
“Most self-managed super fund members and trustees I’ve spoken to want to take control of the money, so if they don’t do this, they put at risk losing control of a portion of those monies.”
He clarified those funds could be rolled over into the SMSF, but it would mean going through an additional step to get the contributions into the right place.
While the process of getting the relevant e-commerce details for an SMSF to be SuperStream compliant can be fairly rapid, particularly if an SMSF messaging service provider is used, the regulator is recommending trustees and members allow a 30-day period from the time the information is sent to the employer to the time the first SuperStream contributions are ready to be made.
In addition to streamlining the superannuation guarantee contributions process to SMSFs, the ATO said it was also keen for funds to be SuperStream compliant to allow it to capture more relevant data about the sector. “There are already some conversations across industry about how once you get all of the SMSFs up to this standard, we can do a lot more in terms of integrating information from different investment platforms and where information flows across different products,” ATO contributions lead data and e-commerce standards Chris Denney told selfmanagedsuper.
Denney said that would allow the ATO to get a starting point as to where the superannuation industry was currently and the direction it should head toward.
Burgess added the system would allow fund members to receive their contributions sooner and allow the ATO to better monitor which employers might be falling behind on their mandatory super guarantee payments.''