Large superannuation funds have baulked at having to pay for the cost of extending SuperStream to self-managed superannuation funds (SMSFs) and has told the Government that SMSFs should be made to pull their own weight via a levy.
The Association of Superannuation Funds of Australia (ASFA) has raised a number of issues with respect to the move to extend SuperStream to SMSFs, not least its cost but also around issues of fraud.
It said that there was a real risk of potential fraud associated with extending rollover services to SMSFs and argued that the regulations would need to ensure that appropriate security measures were implemented, particularly relating to validating bank account details for the rollover monies from Australian Prudential Regulation Authority (APRA) funds to SMSFs.
“To protect the best interests of superannuation fund members, the question of liability also needs to be clarified in the event that incorrect or fraudulent bank account details are provided to the trustee from this mandatory service which the trustee relies on,” it said.
“Superannuation fund trustees and/or their members should not be liable for any loss in these circumstances and the verification of bank accounts should be mandatory before any SuperStream rollover to an SMSF can occur,” the ASFA submission to Treasury said.
“Similarly, validation for the SMSF itself requires the same robust layers of security, ensuring that Anti Money Laundering (AML) and Counter Terrorism Financing (CTF) checks are also made in line with other APRA-regulated fund payment processes,” it said.
On the question of SMSFs being made to pull their own weight, ASFA said that APRA-regulated funds had borne the brunt of the $1.5 billion Super Stream implementation costs and it seemed extending the rollover service to SMSFs would increase those costs further.
“Extending the operation of SuperStream to SMSF rollovers will increase costs further for APRA regulated funds and it would appear with little or no cost burden falling on the SMSF sector,” it said. “During this regulatory reform process that is targeted at SMSFs we recommend that the Government review the levies and charges that SMSFs pay and ensure that they commence sharing the cost of SuperStream services.”