Important changes in the superannuation sphere

In the world of super change is inevitable. As we strive to become more efficient and data-driven, small changes in the short term can make for more streamlined process in the long term.

Two recent changes are of upmost importance in the super world at the moment:

1. Director Identification Number (DIN)

In June last year, the government passed laws introducing the requirement for all directors of a company in Australia to have a Director Identification Number (DIN), including SMSF members who are directors of a corporate trustee. A Director Identification Number (director ID) is a unique identifier you will keep forever.

All directors are required by law to verify their identity with the ATO before receiving a director ID. This is important as it will help to:

• Prevent the use of false or fraudulent director identities
• Make it easier for external administrators and regulators to trace directors’ relationships with companies over time
• Identify and eliminate director involvement in unlawful activity. If you're a director or a corporate trustee of a self-managed super fund (SMSF), you can now apply for your director ID via Australian Business Registry Services (ABRS) online. You will need a myGovID with a standard or strong identity strength to apply for your director ID online.

When you need to apply for a director ID depends on when you first became a director. If you:

• Were a director on or before 31 October 2021, you have until 30 November 2022
• Are appointed as a director between 1 November 2021 and 4 April 2022, you need to apply within 28 days of your appointment
• Will be appointed as a director on or after 5 April 2022, you need to apply before you're appointed.

Once you have obtained your DIN you need to provide the number to your accountant and SMSF practitioner.

2. Rollover processing

SuperStream is a data and payment system used for digital transactions within the super industry. Many SMSFs already use SuperStream for contributions, and large super funds also use SuperStream as their primary way to transact with employers, other large funds, and the ATO.

From 1 October 2021, SMSFs are required to transact in the SuperStream system for rollovers. This means individuals will need to use SuperStream to process rollovers (other than in-specie rollovers) to or from their SMSF.

So what are the benefits of utilising this system?

The benefits of the SuperStream system are that rollovers can be processed faster, more efficiently, and with fewer errors. However, as with most new systems, there are teething issues as the super industry updates their software and procedures to handle the new system.

You will need the following details for your SMSF to be able to send and receive rollovers via SuperStream:

• An electronic service address (ESA)
• An Australian business number (ABN)
• To ensure your SMSF details are up to date with the ATO, including your SMSF's bank account.

To minimise delays when rolling super to or from an SMSF, the ATO advises that funds must ensure the SMSF details provided to the transferring fund match the details it holds.

From my experience so far, the new system is great when it works but there is still work to be done when it comes to SMSFs interacting with the various Australian Prudential Regulatory Authority (APRA) / Retail Funds. The ATO is working closely with the superannuation industry to resolve the current teething issues.

If you require assistance with the above, get in contact with the team at PKF today.