Rollover Super to an SMSF via SuperStream
From the 1st October 2021 a SMSF is required to use SuperStream to receive rollovers of superannuation benefits from other regulated and complying superannuation funds such as industry super funds, retail super funds or from one SMSF to another SMSF. There are some exceptions which are discussed below. Prior to SuperStream a superannuation fund was required to use a manual rollover benefits statement (RBS) as part of the rollover process.
What is a SuperStream Rollover?
This is the process a SMSF fund uses to transfer a member’s superannuation benefits between super funds. It is an electronic transfer of SMSF and member data. The physical payment is done separately as an electronic funds transfer of cash from the transferring fund to the receiving fund’s SMSF bank account.
When must a SMSF use SuperStream to Receive a Rollover Super Benefit?
A SMSF needs to use SuperStream at all times except as discussed below. It is required whether you want to do a partial rollover of your member super account or your entire super balance.
The SMSF trustee must comply with the SuperStream rollover rules. If the rollover is not initiated via SuperStream the transferring fund would breach the payment standards in the SIS regulations which could lead to an auditor contravention report (ACR). Furthermore, the SMSF receiving fund may have to account for the rollover in as a contribution which may cause the SMSF to fail the contribution caps.
Exceptions to rollover requests via SuperStream
The transferring super fund can use an Australian Taxation Office (ATO) “Rollover Benefits Statement” form if it is unable to use SuperStream due to one of the exceptions listed below. A copy of the RBS is required to be given to a member within 30 days of the payment being made. A copy of the RBS is required to be provided to the receiving fund within 7 days of the payment. A copy of the form can be found on the ATO website. The form is not lodged with the ATO.
In-specie rollovers
An in-specie rollover is a noncash rollover or transfer of assets which represent the value of the member’s rollover into the SMSF. For example a SMSF member may want to transfer part of their existing super from their parents self-managed super fund to their own new fund . The member wants to retain 5,000 BHP shares. The rollover is unable to be processed using SuperStream and thus a manual RBS must be prepared.
A foreign super fund transfer
It may be possible to transfer money held with a foreign super fund to a SMSF. This is dependent on the laws of the foreign country, the SMSF’s governing rules and the superannuation laws and regulations. The rollover is unable to be processed using SuperStream and thus a manual RBS must be prepared.
Rollover from a non-complying fund to a complying SMSF
A manual RBS is required to process the request when non-complying funds rollover funds to a complying SMSF. All super contributions made after 10 May 2006 are required to be reported in the RBS as member contributions. The information in the RBS is used by the receiving SMSF to prepare a member contributions statement. The ATO then count the member personal contributions against the member’s non-concessional contribution cap.
A family law super splitting payment
When part of a family law agreement includes rolling over the spouse’s entitlement to another SMSF or other regulated industry or retail fund a manual RBS is required.
Superannuation Death benefit rollover details
In addition to processing a rollover request via SuperStream to transfer a death benefit to a dependent beneficiary a “Death Benefit Rollover Statement (DBRS)” is required to be provided to the beneficiary within 30 days. A DBRS is required to be given to the receiving fund within 7 days if the dependant is a child beneficiary. The form can be obtained from the ATO website or a statement with the same details as the ATO form can be provided.
Using an Electronic Service Address (ESA) for Transferring Funds to a SMSF
A significant component of SuperStream is an active electronic service address (ESA). A SMSF must have one to participate in the SuperStream process.
Setting Up an ESA
An email address is not an ESA. The ESA enables the SuperStream data to pass on to the correct message recipient.
An ESA can be provided from a SMSF agent such as a SMSF administrator, accountant, tax agent or some banks through the specialist superannuation software used to prepare the fund’s financial statements. Alternatively, the SMSF trustee can register with a SMSF messaging provider. Examples of ESA addresses include smsfdataflow, QUICKSUPER, CLICKSUPER etc. Refer to the ATO’s SMSF Messaging Providers Register for further providers. It is important to ensure the provider used by your SMSF is registered to enable rollovers and release authorities.
All clients of SMSF Australia are provided with an ESA for free as part of our annual fees and it will be the ESA smsfdataflow, all lowercase and one word.
Updating Your ATO Records
The ESA must be notified to the ATO which can include online services for business, contacting your tax agent, contacting the ATO directly or by lodging a paper form “Change of details for superannuation entities (NAT 3036).
Ensure the ESA is updated when changing software providers or accountants and SMSF administrators.
Rollover Requirements for SMSFs
Ensure the following receiving SMSF’s ATO details are correct at the time of the rollover:
- ESA (refer above)
- Australian Business Number (ABN)
- Bank Account
- Member and fund details match the ATO records
The SMSF’s bank account must be unique to the fund and match what the ATO has recorded on their system. The bank account must be able to receive electronic payments.
It is crucial to ensure your SMSF details held by the ATO reflect correct fund details and member details.
How to Complete the Rollover of Your Super Benefits to a SMSF
1. Rollover Initiation Request
- the member can initiate a rollover request by contacting the transferring fund directly to request the rollover
- a written request can be made by the member and the SMSF trustee advises the transferring fund by making an “Initiate Rollover Request” (IRR) via the SuperStream process
- the member can use their MyGov account by lodging an electronic portability form (EPF) – provided this is a request for 100% of the member’s superannuation balance
- complete a paper form (NAT 75359) and give to the transferring fund – similar to the EPF it must be in relation to the member’s entire super balance
2. Verify Eligibility and Documentation
The ATO will verify the following if the request is made using MyGov when an EPF is lodged:
- the member’s identification to ensure it matches their records
- confirm the individual is a member of both the transferring and the receiving fund
- confirm both the transferring and the receiving funds are regulated funds and not wound up
- ensure the receiving fund is not suspected of being part of an illegal early access arrangement
The transferring fund will then process the EPF as it has no obligation to verify the member’s information.
When a rollover request is not made via MyGov the transferring fund must verify the information provided which includes:
- complying status of the SMSF
- the ABN is registered as a SMSF
- the member’s TFN is connected to the SMSF’s ATO records and is not compromised
- the member has not died
- the SMSF bank account details match the ATO’s records
- the ESA details recorded with the ATO matches
When, using IRR by the receiving fund or when a member directly requests a rollover from the transferring fund, it MUST verify the SMSF and the member details using the SMSF Verification Service (SVS). The transferring fund verifies the SMSF member’s tax file number using “SMSF memberTICK”
The transferring fund will receive a verified or a non-verified response message via superStream and seek further information from the member if the ATO is unable to verify the details via SVS or SMSF memberTICK. The information must be requested within 5 business days of receiving the rollover request. The member requesting the rollover will receive a message from the ATO when the SVS is used alerting them to the rollover being made which enables the member to contact the transferring fund if they did not initiate the rollover.
3. Monitor the Transfer Process
When the transferring fund has received all the information required and it has been verified the receiving SMSF gets a message from the transferring fund with the details of the rollover together with the payment information. The receiving SMSF must confirm the receipt of the rollover into the fund’s bank account.
The transferring fund must action a rollover request within 3 business days after all of the information required to transfer the super benefits has been received. The receiving fund has 3 business days after receiving the payment to allocate the rollover amount to the member’s account.
4. Report the Rollover Payment
A super fund trustee must provide a RBS to the SMSF recipient. This is satisfied when the data is received via SuperStream. Additionally, the transferring super fund provider must send a copy of the RBS to the member via email or mail within 30 days.
Key Takeaways – Transferring/Rolling Over Super to an SMSF
- a rollover is processed via SuperStream for a member of your SMSF
- some exceptions include in-specie rollovers, a foreign super fund transfer, rollover from a non-complying fund and a family law super splitting payment involving a rollover to another fund
- SuperStream rollover messages are used by the ATO to communicate that the details of the SMSF and the member are verified and the rollover can proceed
- the transferring fund may need to seek further details from a member or a SMSF trustee if the ATO advises the information does not match what is on their system
- the rollover details are verified using the fund validation service, SVS and SMSF memberTICK, unless a member request payment of the rollover using MyGov
Do you need help with understanding SMSF Rollovers?
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