SMSF trustees are encountering significant problems with adhering to the SuperStream protocols when looking to make a member rollover into a public offer fund due to certain procedures governing electronic fund transfers being imposed by the banks.
“If an SMSF is rolling money to an APRA (Australian Prudential Regulation Authority)-[regulated] fund, some banks impose a daily limit on how much can be withdrawn from that bank account,” SMSF Association deputy chief executive and director of policy and education Peter Burgess noted.
“[Subsequently] we’ve seen many cases where the rollover has had to happen over a number of days. So the APRA fund is expecting one figure with a payment reference number and what they’re getting is a few transactions from the SMSF with different payment reference numbers, which means they have to reject the rollover and then it gets sent back and you have to start again.”
According to Burgess, the SMSF Association is in the process of trying to formulate a solution for this challenge.
“We are working with the APRA funds and working with the banks to find a solution to this because it doesn’t work under the SuperStream measures,” he said.
On a more positive note, he pointed out issues previously encountered with the system are beginning to be resolved.
“Some SMSF members have found it difficult to obtain an electronic service address. If you’re not using one of the main admin providers, [this task] can be difficult,” Burgess acknowledged.
“Having said that, Australia Post is now providing electronic service addresses for a notional fee. So it’s much easier now for an SMSF member who is not using one of the recognised admin platforms to obtain an electronic service address.”
To this end, he said the ATO has recognised this issue and has afforded SMSFs the ability to make some rollovers using a paper-based process.
“It only applies where an SMSF is rolling money [over] to an APRA fund or where the SMSF is rolling money to another SMSF,” he warned.
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