Graeme Colley
It is imperative that SMSF trustees have an active electronic service address (ESA) to ensure they are compliant with SuperStream, says Graeme Colley, the SMSF Association’s Director of Technical and Professional Standards.
“The Australian Tax Office estimates about five per cent of all SMSF trustees who are employees don’t have an active ESA, and they run the real risk of having their SG contributions going to a default super fund.
“Although five per cent seems a small percentage, when it’s considered about 300,000 funds receive employer contributions, then it means about 15,000 funds don’t have an active ESA – a sizeable number.
“It’s also worth noting that as small employers enter the SuperStream system in 2015-16, there will be an increase in the number of employer contributions to SMSFs and, in all likelihood, an increase in the number of ESAs not active.”
Colley says that in most cases it’s simply a case of the SMSF being unaware they haven’t correctly linked their fund to the messaging provider, the entity responsible for processing employer contributions and then informing trustees about this information. [A common error is to think an email address is an ESA.]
“Remember, too, that if an SMSF trustee provides an ESA to their employer and the messaging provider is not expecting a contribution message for this SMSF, it will be rejected. The employer will receive an error message and is required by law to obtain the correct information from the SMSF.
“Where this occurs, the employer should ask their employee to complete a Choice of Super Fund Form that mandates the provision of both ESA and bank account details – information the employer needs to be able to send contributions electronically.
“If, after 28 days, the employee does not provide a completed standard choice form to them, the employee can instead make the super contributions to their default super fund.”
Colley said to be SuperStream compliant, SMSF members need to provide bank account details, an Australian Business Number and an ESA to their employer.
