New Standards for SMSFs to accept contributions and rollovers

From 1 July 2014 significant changes will apply to SMSFs which receive contributions from unrelated employers and rollovers and benefit transfers.

From 1 July 2014 SMSFs will have to comply with the data and e-commence standards if they wish to receive employer contributions from “large” and “medium” employers (ie employers who have 20 or more employees).  From 1 July 2015 SMSFs must receive employer contributions from “small” employers (ie employers with fewer than 20 employees) in accordance with the data and e-commence standards.

Fortunately these arrangements will not apply to employer contributions from related employers and will not apply to member contributions.

Also, from 1 January 2015 in order to receive rollovers and benefit transfers, SMSFs will have to comply with the data and e-commence standards.

The fundamental principle is that contributions, rollovers and transfers will occur by means of electronic funds transfer from one bank account to another bank account.  Information relating to the contribution, rollover or benefit transfer will also be provided electronically rather than by paper.  The only exception will be employer contributions from related party employers and member contributions.

SMSFs will have to either have the facilities to receive EFTs and information transmissions, engage an administration service which provides such facilities or subscribe to a message delivery service.

As a minimum for SMSFs to receive employer contributions, rollovers and benefit transfers under the new data and e-commence standard, the SMSF will have to provide their ABN, bank account details and electronic service address (which is more than merely an email address) or engage a service bureau which provides an electronic service address.