SMSF Association collaborates on improving rollover standards

When requesting rollovers from APRA regulated funds, be prepared to provide further SMSF bank account documentation, was a key message delivered by the SMSF Association’s Deputy CEO/Director of Policy & Education, Peter Burgess.

The SuperStream rollover standards for SMSFs, which commenced in October 2021, were designed to improve the efficiency and security of rollovers between the two sectors. This was to be achieved through streamlining the process and eliminating paper-based rollovers.

However, speaking at the SMSF Association’s National Conference, which commenced in Adelaide yesterday, Burgess said some 6 months after the introduction of these new standards, the SMSF sector is often still experiencing frustrating delays when rolling over funds from APRA regulated fund to SMSFs – so what has gone wrong?

Burgess cited the APRA regulated funds inability to adequately verify the SMSF bank account as a major contributing factor.

Burgess explained that the ATO’s SMSF Verification Service (SVS) enables the APRA regulated funds to verify many things including the complying status of the SMSF, the SMSF’s ABN and that the member requesting the rollover is a member of the SMSF.

However, when it comes to the fund’s bank account, the ATO’s SVS only enables the APRA regulated funds to verify that the information provided at the time of the rollover request matches the information that the ATO has on file.

“There is no verification against the information held by the financial institution, and therein lies the problem for the APRA regulated funds which are required under their AML/CTF obligations, and their own client identification processes, to identify and verify the SMSF bank account against information held by the financial institution, Burgess said.

To avoid unnecessary rollover delays, when initiating a rollover from an APRA regulated fund, Burgess encouraged advisers to clarify what documents are required by the ARPA regulated fund to satisfy their bank account verification requirements.

The SMSF Association is now meeting with the APRA regulated fund sector on a regular basis, and what is extremely encouraging, is that the APRA regulated fund sector is just as committed and determined as we are to unpack all the issues and to remove the barriers which prevent funds being transferred between our respective sectors in a timely and safe manner, Burgess said.

“Ultimately from the SMSF Association’s perspective we would like to reach agreement with the APRA regulated funds about the bank account verification documentation that they require to satisfy their obligations.”

“Hopefully this can then become a standard that applies to all APRA regulated funds so everyone knows up front what bank account verification documents are required, and we can avoid situations like we have now where the bank account verification documentation can vary between funds and sometimes within the same fund, Burgess said.