The ATO has extended the new SuperStream rules to cover SMSF rollovers and compliance with auditor reporting obligations.
On 18 August 2021, the ATO provided guidance on the use of SuperStream for all SMSF rollovers and outlined their expectation that all SMSF auditors report any non-compliance through an Audit Contravention Report.
Amendments to the Superannuation Industry (Supervision) Regulations 1994 (SISR) to extend the operation of SuperStream to cover self-managed super funds (SMSFs) mean that SMSF trustees are required to comply with the rules in division 6.5 of part 6 of the SISR for any rollovers, including partial rollovers, to and from an SMSF requested from 31 March 2021. The rules will not apply to in-specie rollovers.
In broad terms, the ATO noted that division 6.5 prescribes what information needs to accompany requests for rollovers to regulated super funds. It also requires trustees to receive rollover requests electronically, validate member details, use the ATO’s electronic services to verify fund and member information, and complete rollovers within three business days.
The ATO granted SMSF trustees a transition period until 30 September 2021 to comply, meaning that all rollovers full or partial need to be lodged through SuperStream from 1 October 2021.
“If a trustee fails to comply with the rules in division 6.5, this is a contravention of the ‘payment standards’ in Part 6 of the SISR, in particular regulation 6.17,” the ATO stated. “As regulation 6.17 is a reportable contravention, auditors will need to obtain sufficient, appropriate audit evidence to form an opinion on whether the fund has complied with the rules in division 6.5.”
Where the SMSF is the transferring fund of a rollover, auditors must obtain evidence confirming the SMSF received the rollover request which would have come from either the member, the receiving fund or the ATO.
Where the SMSF is the transferring fund of a rollover, auditors must obtain evidence confirming:
- The SMSF received the rollover request (which would have come from either the member, the receiving fund or the ATO);
- The rollover was made via SuperStream (for example, a printout from the trustee’s software provider); and
- The rollover occurred no later than 3 business days after receiving all the information required to process the request.
Where the SMSF is the receiving fund of a rollover, auditors need to obtain evidence confirming:
- Where the rollover request was received by the SMSF directly from the member, the SMSF trustee has used SuperStream to request the rollover from the transferring fund (for example, a printout from the trustee’s software provider); and
- The rollover was allocated to the member within three business days after it was received, and all information was received to enable it to occur.
Where a member requests a rollover to or from an SMSF on or after 1 October 2021, and an approved SMSF auditor identifies non-compliance with the rules in division 6.5 and therefore a contravention of regulation 6.17 when conducting the annual compliance audit, they will be required to:
- Notify the fund trustee(s) in writing;
- Providing the reporting criteria is met, report the contravention to the ATO via an ACR at Section E (Contraventions) and describe the event as a failure to comply with the SuperStream rules; and
- Modify Part B of the SMSF Independent Auditor’s Report if the contravention is material.
We recommend accountants update their processes now to avoid any embarrassing qualified audit reports and potential fines from the ATO.