Why was my SMSF Rollover Rejected?
To roll over your super benefits from another super fund, such as an APRA-regulated fund, a retirement savings account, or another SMSF, into your SMSF, or conversely, to roll over super benefits from your SMSF to other funds, you must use SuperStream. There are minor exceptions, but rollovers are processed via the SuperStream Data and Payment Standards.
SuperStream carries rollover details and messages between super funds. An Electronic Service Address (ESA) ensures messages are delivered to the correct recipient. The SuperStream process verifies fund and member details against ATO and APRA data and rejects rollovers if there is a mismatch.
What are some common causes of SMSF rollover rejections?
Some common causes of rollover rejections include:
An SMSF with an ESA provider not registered to process rollovers
Not all ESAs are the same. An SMSF can have only one ESA recorded with the ATO. An ESA can support employer contributions, process rollovers, and handle release authorities. Major superannuation software providers, such as Class Super, support those processes. However, some ESA providers listed on the ATO register of SMSF messaging providers, such as Macquarie Bank, Colladium SMSF Gateway, and Westpac Quick Super SMSF Gateway, support only employer contributions, not rollovers or release authorities.
Our firm uses the ESA ‘smsfdataflow’ which we provide on a complimentary basis to our clients included in our fixed annual fees.
An SMSF changing to a different accountant
A rollover could be rejected if an SMSF doesn’t update the ATO with the new ESA when transferring your SMSF to a new accounting firm, because the previous accountant used a different provider. You can correct this by notifying the ATO of the change. We can do this electronically for our clients, or the trustee can do it via the online services for business (provided you have set up myID).
While the fix is simple, determining why the rollover is rejected isn’t always easy, which can delay the SMSF receiving the rollover.
Mismatched fund or member details
The SMSF has not updated the ATO with changes, or the superannuation software contains incorrect details, such as the SMSF’s bank account, SMSF ABN, a member name change when they get married, member addresses, tax file number, or other details. Similar to changes in the fund’s ESA, fund and member details can be notified via the fund’s accountant or online services for business.
Exceeding the SMSF daily bank limit
Rolling super benefits out of an SMSF to another fund can involve a large cash transaction, which the bank’s daily limit may restrict. You must split the rollover into multiple transactions or ask the bank to lift the limit for a one-off transfer. However, if you split the transaction, each cash transfer must have a separate ‘Payment Reference Number (PRN)’ because it is used to reconcile the cash and the rollover details.
Incorrect or no Payment Reference Number (PRN)
When making the payment from an SMSF to another fund, the PRN must be quoted in the description.
Timing
A rollover must be completed within 3 business days, with limited exceptions. A member can make a written request to their SMSF (receiving fund) to initiate a rollover of their super benefits from another SMSF or APRA fund (transferring fund). The receiving fund must notify the transferring fund via an ‘Initiate Rollover Request (IRR)’. This is done through the receiving fund’s software. However, the IRR triggers the 3-day window, and it can be difficult to ensure market valuations are completed, financial statements are updated, and life insurance coverage is not inappropriately cancelled early. Missing the 3-day window may result in the rollover being rejected.
A rollover requested to or from another fund may simply time out due to delays in verifying member or fund details.
Internal reasons for rollover rejection
Some industry funds may reject a rollover due to their internal processes, which can include:
- inadequate proof-of-identity documents
- rollover request missing information
- specific internal compliance checks
In these cases, the best thing you can do is call your fund and follow them up on the rollover. Unfortunately, your accountant cannot call your existing fund for privacy reasons, so it is best to call them directly as the member to ensure they have what they need to process the rollover.