As it stands, SuperStream, which allows electronic rollovers, can only be used by two APRA funds. However, under the exposure draft regulations released by the government this morning, SuperStream would also be accessible to SMSFs as of 30 November 2019.
“The Turnbull government is supporting Australians who choose to manage their own superannuation through an SMSF by making it easier for them to roll their existing superannuation funds into an SMSF,” said Minister for Revenue and Financial Services Kelly O’Dwyer.
In a statement, Ms O’Dwyer said extending SuperStream would reduce the compliance costs for SMSF and APRA trustees by cutting down on paper-based and manual processes, while also reducing the time taken to roll over the funds.
She said it would also “improve the integrity” of the super system through APRA funds’ mandatory use of the Australian Taxation Office’s SMSF verification service.
An explanatory statement issued by Ms O’Dwyer said the amendments to the Superannuation Industry (Supervision) Act 1993 (SIS Act) would allow a member of an SMSF to request a rollover of part or all of their superannuation benefit to either the receiving or transferring fund.
The government first touted the idea in April, when Ms O’Dwyer said she had asked the ATO to work with the industry on the reform.
The SMSF Association has historically strongly supported the move, chief executive John Maroney said at the time.
“This change to the mechanics of the super system is important to SMSFs. Currently, SMSFs can experience lengthy delays in receiving rollovers from large superannuation funds, so this change will ensure rollovers are made in a timely manner, enhancing choice and efficiency in the superannuation system,” he said.
“This will minimise friction between various parts of the super system and also reduce the time it takes for SMSF members to access their retirement savings held in large funds.”
However, it could already be too easy to set up an SMSF, REI Super argued in June.
CEO Mal Smith said the Productivity Commission's finding that low-balance SMSFs significantly under-perform is an indictment of the current process.
He argued that SMSFs aren't worth it unless the investor has at $2 million in their balance due to the impact of fees and lower returns.