Welcome
The chair welcomed attendees to the meeting.
Rollovers from SMSFs
Limits and schedule 3 restrictions
The group discussed SMSFs encountering daily transfer limits from their bank when making a rollover from the SMSF.
The ATO acknowledged that there are scenarios where the current advice is not practicable, this being for SMSFs to raise their daily limit, split a single large rollover into multiple (smaller) rollovers, or seek a different financial institution.
Some SMSFs have attempted making payments through a bank branch using the receiving fund’s BSB and account details and payment reference number (PRN), but the payment has been rejected by the Australia Prudential Regulation Authority (APRA) fund as it is not a complying payment.
Schedule 3 Payment Methods of the Data and Payment Standard specifies complying payment methods and it also states an alternative payment method can be used in agreement with the other party.
Group discussion
- The SMSFs are being treated as retail not wholesale/business clients, so are having retail rules applied to them.
- Individual banks and individual funds have different rules. Some of industry are able to receive branch transactions so long as the transactions have the PRN.
- Impact of New Payment Platform is different across institutions and can cause issues with PRNs not being correctly supplied to the recipient.
- One possible ‘alternative payment method’ would be for SMSFs to use cheques, however this was viewed by all as a huge backward step and counteracting the intent of the change.
- There are constraints impose by banks that make large transactions from SMSFs to APRA funds difficult.
- SMSF providers to investigate which institutions their clients and SMSF trustees are having problems with and banks that will allow higher transaction amounts.
Temporary support for SMSFs
The ATO advised that Australia Post are progressing their rollovers version 3 (RV3) build, and anticipate commencing testing with the ATO mid-February 2022, and are asking industry for Business 2 Business partners in early March 2022. The ATO can facilitate introductory meetings.
Some SMSFs are having difficulties obtaining an electronic service address (ESA), where they only require a single transaction. For example, a rollover out to close their SMSF, rather than a full administrative solution and have particular time sensitivities, for example, to conduct a time sensitive rollover.
ATO is exploring an avenue for SMSFs to use a paper rollover where they are unable to obtain an ESA. This would be a short-term facility until end of the 2021–22 financial year.
Industry feedback supported this short-term facility with the addition that communications are needed for APRA funds that they can accept rollovers outside of SuperStream in those limited circumstances. The ATO undertook to make those communications to APRA funds, SMSFs, and scripting for ATO staff.
Rollovers to SMSFs
APRA representatives provided feedback on issues being encountered regarding rollovers from SMSFs.
The ATO advised that SMSF auditors would be required to lodge an Audit Contravention Report for SMSFs that fail to use SuperStream for rollovers covered by the Standard.
Rollovers excluded from SuperStream
The following rollovers are not in scope for SuperStream:
- transfer of super from an overseas superannuation fund
- applications for contribution splitting from the member’s account in Fund A to their spouse’s account in Fund B
- transfer of super between a member’s account and their spouse’s account in another fund under a family law contribution split.
Funds may choose to use SuperStream to make the payment if they have all the mandatory information.
Rollover v3 web content
The ATO has updated the Implementation and Onboarding Information document (FAQ), which will be published on the RV3 wrapper page.
The FAQ document will be able to remain on ato.gov but in topic groupings outside of a pdf. In its new format it will be more easily searchable, which industry welcomed.
Decommissioning of Rollovers v2
The ATO advised the group that Rollovers v2 (RV2) will be decommissioned at the end of March 2022 as there is currently very low traffic, and no-one currently registered for ROLL2.
The ATO will also update the fund validation service user guide to remove references to RV2 and backwards compatibility.
Industry asked for messaging to funds that they do not necessarily need to remove RV2 codes as a requirement, merely not send RV2 messages.
Gateway Network Governance Body advised that gateways are currently co-ordinating versioning to decommission RV2. If a version 2 message is sent, rejection responses from gateways will start in the next couple of weeks. Version 2 responses will still be processed until the end of March.
Wrap up and close
The Chair thanked the group for their attendance and participation.
Summary of the key topics discussed at the SMSF Rollovers Authorities v3 Co-design Group meeting 1 February 2022.