Scott Hooper outlined the purpose of this session was to take some time to work in smaller groups to discuss the positive and negative aspects of the relationship SFWG members have with the ATO.
In concert with the pre-reading material distributed in relation to these issues, members where asked to consider the relationship in a broader sense than just the information and technology systems, and to focus on the administrative practices rather than interpretation or application of specific legislation.
A summary of the feedback from the three small groups is provided.
SFWG forum
All three groups acknowledged the value of the forum.
It provides:
- the opportunity to bring issues forward for discussion and resolution, with the reassurance of confidentiality;
- the balance of industry segment and stakeholder representatives that enhances interaction with other funds and industry representatives about issues of common interest, and identify better practices;
- the ATO with an industry view, not just of one particular organisation;
- stakeholders with the opportunity to give 'early warning' of issues;
- SFWG has become more collaborative in recent years
Some concerns were raised about:
- the limited extent of technical discussion that can occur at scheduled forums, particularly in relation to new government initiatives. It was suggested there may be some benefit to all parties for a Treasury representative to be included as an invited representative.
- possibility of reconsidering membership of SFWG as large funds may need more than 1 representative as they often have diverse business areas etc.
With reference to the pre-reading material distributed for this meeting, members were asked to reflect on recent interactions with the ATO in line with some focussing criteria. Responses were provided in relation to the following criteria:
Does the experience raise concerns about the cost of compliance now and/or into the future?
- Concerns exists when significant system changes are required to comply with new or amended superannuation measures that affect only a small proportion of taxpayers / super fund members.
- Members felt that where the ATO has the ability to influence the processes required to comply with new or amended superannuation measures (i.e. where the process is not specified in legislation), that more consultation with industry would result in a more workable and less costly outcomes for super funds and administrators.
- A view was expressed the ATO may be moving towards a 'black and white" approach to policy, rather than consultation with industry to find an alternative and workable option/s.
- Recent decisions (e.g. rollover of benefit) have delivered outcomes that don't work for industry whereas more consultation with industry may have lessened the impost on funds that ultimately pass the cost on to members.
- Members noted that more frequent reporting may actually be a burden however simpler reporting would be of significant benefit and would reduce compliance costs for super funds and administrators.
- Members advised that when the ATO issues protocol documents for system changes, there would be great benefits delivered if the updated specifications could be made as early as possible as this would allow funds maximum time to build/change their systems to suit. Protocol documents don't provide enough detail to do this.
- Many funds have commented that they receive similar defect audit findings so if everyone is "getting it wrong" maybe the ATO should look at the policy/practice etc and change this instead or provide better information for funds.
- Audit is also a lengthy process for the larger funds and anything that could streamline this would be positive.
Do you expect that future costs of compliance will be impacted by Stronger Super reforms?
- Members agreed that the future cost of compliance in implementing Stronger Super reforms will be significant; however these reforms are generally accepted by the industry as a positive change with long term benefits for both taxpayers / super fund members as well as super funds and administrators.
- Some of the measures are more beneficial than others, so fund acceptance of the cost impost will vary from measure to measure.
- Members emphasised that adequate lead time was an imperative for funds to implement required changes to enable funds to comply with Stronger Super reforms.
Do you have confidence that the ATO will remedy your issue in a timely manner?
- Overall, members expressed a high degree of satisfaction about their interactions with the ATO; members have a high level of confidence when dealing with the ATO about issues impacting their funds members or fund reporting obligations, particularly with the Client Relationship Team (CRT), and in the information provided by specialist areas as a result of the interaction with CRT.
- However, members expressed very low confidence in the ATO hotline (13 10 20) and raised concerns that the level of specialist superannuation knowledge was not sufficient to resolve the issues raised by super funds, administrators and members.
- Issues tend not be resolved but become circular between the fund, the fund member, and the ATO, and there are many examples where the member has been given different advice by the ATO compared with what the fund has obtained from either the hotline or CRT.
- Some frustration is created for funds when it appears the fund member has been given incorrect advice by the ATO as the fund can't necessary interact directly with the ATO to resolve the issue due to ATO privacy policy limitations.
- Many SFWG members indicated that they no longer use the ATO hotline as a channel for resolving issues.
- Most members indicated that they usually refer all issues and queries to CRT (via opssupercrt-rundle@ato.gov.au) because a more reliable response would be provided but acknowledged this may overload the team.
- Comment was made about an imbalance of service expectations. Funds are often expected to respond within 7 days, but fund queries of the ATO escalated to CRT often take longer (e.g. several weeks).
- Members had a high level of confidence in the ATO website material however navigation (search function) could be improved. More consultation with industry prior to publishing information regarding superannuation could further improve the usefulness of the ATO website material.
- Concern was expressed about the difficulty in getting traction on the more problematic issues e.g. ICP based Statements of Accounts. Funds highlighted that:
- the ATO enterprise wide format of the statements makes it unusable for funds in reconciling accounts
- this issue was signalled to the ATO very early after implementation of the new statements in 2009; there has been some tinkering to refine some aspects, but these have not resolved funds concerns.
- Several members raised the idea of having 'client relationship managers' (as there were previously) as there was currently difficulty in getting information or right contacts for the variety of super products.
Do you have confidence in the ATO to deliver on Stronger Super reforms?
Members had a high level of confidence in the ATO to deliver on the Stronger Super reforms however indicated that sufficient ATO resources would be key to a successful delivery.
Comment was made that there will still be some complexities with Stronger Super including grandfathering, etc.
Is the current system design an impediment to meeting your obligations?
Members indicated that the following elements of the current system design are an impediment to meeting their obligations:
- outdated processes
- legacy product issues
- grandfathering of rules
- complicated rules and processes
What improvements do you see need to be made?
SFWG members agreed that the Stronger Super reforms will address many of the above concerns.
SFWG members rated the effectiveness of the current super system design 7/10 and expected the Stronger Super reforms to increase this rating to 9/10.
Scott Hooper thanked members for their useful and constructive feedback. The ATO will take these issues on board and where possible, factor them into our processes.
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Last Modified: Monday, 4 June 2012