SMSF compliance can't be outsourced: Multiport
The outsourcing of self-managed superannuation fund (SMSF) administration will only be feasible if it deals exclusively with the "pure accounting" side, according to Multiport's Philip La Greca.
La Greca, who is technical services director at AMP-owned SMSF administrator Multiport, said it would be difficult for overseas operators to completely comprehend SMSF compliance.
"You have to understand the basis of the Australian superannuation rules to be able to run compliance. It's not like debits and credits and the general ledger," La Greca said.
SMSF administrators spend much of their time talking to people at the Australian Taxation Office about compliance - something that would be difficult to do from overseas, he said.
As a result, the challenge for Australian SMSF administrators looking at outsourcing would be to separate the accounting work from the compliance work, he said.
But separating the two would be complicated by the fact that certain accounting transactions raise compliance "triggers" for professional SMSF administrators, La Greca said.
Often an SMSF administrator will observe transactions that should not have happened from a compliance point of view - something that might be missed by an overseas outsourcer, he said.
As a result, even the outsourcing of "pure accounting" work could result in double handling, La Greca said.
"If [there is a high level of control over what the] SMSF clients can do then maybe it will work, but [I'm not sure] how easy it is to keep SMSFs 'controlled' - that's the whole point of being an SMSF trustee," he said.
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