SuperStream and superannuation in general have a lot of terms and processes that can be confusing to understand. The below Glossary of Terms has been written to help provide an easy reference for terms which SMSFs may encounter when processing contributions, rollovers and release authorities using the wrkr ESA.
General:
An ESA (electronic service address) is a special internet code used to represent a provider - such as wrkr - that a SMSF will be using for their SuperStream compliance. Apart from SMSFs that only receive contributions from a family business, an ESA is mandatory for all SMSFs to receive contributions from an employer. An ESA is used by a SMSF to receive contribution data and process rollovers and release authorities electronically. An ESA processes data/ information - it does not process payments. An ESA is NOT an email address or a number - it is a word.
A complying and regulated SMSF indicates that the SMSF is in full compliance with all relevant legislative requirements. The ATO administers the relevant super laws relating to SMSFs. If the ATO finds an issue with your SMSF, they may remove your regulatory status which will mean that your SMSF is no longer complying. This will affect your ability to receive contributions from employers and process rollovers. To check your SMSF to ensure it is complying and regulated, please search the SMSF ABN within the ATO’s Super Fund Lookup website.
An APRA-regulated superfund is a superfund which is regulated by APRA. Whereas SMSFs are regulated by the ATO to ensure all appropriate legislative requirements are being adhered to, APRA regulates all other superfunds. APRA-regulated superfunds can receive and process rollovers.
An USI (Unique superannuation identifier) is a code which is used to identify superfunds and their individual products for contributions and rollovers processed through SuperStream. Superfunds may have one USI or a USI for each product/ division under their management.
Rollovers:
A full rollover occurs when all super within a member account is transferred to another superfund. This means there is no super balance left within that account after the rollover – the entire balance has been rolled out to another superfund.
A partial rollover occurs when only a portion of super within a member account for a member is transferred to another superfund. This means that there is a balance left over after the rollover occurs and the SMSF member will hold a membership with both superfunds – the transferring superfund and the receiving superfund. Paying for an insurance premium from the SMSF is an example of a partial rollover to another superfund.
A roll out describes the direction of a rollover, where monies are being rolled OUT of your SMSF to another superfund. In this scenario, your SMSF is the transferring superfund, where you will be transferring superannuation OUT of your SMSF to a receiving superfund, who will receive the sent superannuation.
A roll in describes the direction of a rollover, where monies are being rolled INTO your SMSF, from another superfund. In this scenario, your SMSF is the receiving superfund, where you will be receiving superannuation INTO your SMSF from another superfund - the transferring superfund.