SuperUpdate September 2011
SuperUpdate September 2011
For the period ending 31 December 2011, all super providers must lodge a lost members statement to show all current lost and inactive members on their records. This should be done by 30 April 2012, irrespective of whether the members have been reported before. You are not required to report members who are found, transferred or reported in error.
This will improve the accuracy of information held on the register and help members reunite with their lost super.
If you have any questions about the lost members register (LMR) re-report, send an email to SuperCRT@ato.gov.au
We are taking a more holistic approach to our role in securing retirement income for Australians and assisting individuals to reunite with their super entitlements.
We manage lost and unclaimed super from four sources:
- as unclaimed super, including former temporary residents and small or insoluble lost accounts
- as lost super
- via the departing Australia superannuation payment (DASP)
- through the superannuation holding accounts special account.
We also manage online systems to help reunite individuals with their super. These include SuperSeeker (for individuals), DASP online (for former temporary residents) and SuperMatch (for funds/providers/intermediaries). Through these systems we can arrange the transfer of lost and unclaimed super entitlements to an active super fund account or pay super to individuals as part of their retirement income.
However, our management of lost and unclaimed super relies heavily on reporting from Australian Prudential Regulation Authority (APRA) funds and their administrators. Therefore, the better the data and payment transfer between us, the more likely individuals are to be reunited with their lost super.
To improve the effectiveness of these systems, we will be running compliance education sessions; have planned improvements to SuperSeeker in 2012; are considering the expansion of SuperMatch; and are enhancing our payment methods.
Attend our compliance education sessions to help improve your lodgment results
In September and October we are holding education sessions for APRA funds and their administrators. The aim of these sessions is to improve understanding of legal obligations, reporting, payment and record-keeping requirements. We expect this training will improve the quality of future information supplied to us and therefore ultimately assist in reuniting more members with their super.
The sessions will focus on clarifying reporting obligations for unclaimed super money, including former temporary residents and small or insoluble lost member accounts, as well as some pointers on obligations around the lost members register and DASP.
The compliance education sessions will be held in Sydney, Melbourne and Brisbane. These sessions are open to anyone from your organisation.
For more information about the sessions or about how to register, email us at SuperCRT@ato.gov.au
For the period 1 January to 30 June 2011, you must lodge your Unclaimed superannuation money statement (USMS) and make payment on or before the scheduled statement day of 31 October 2011. If you have an approved deferral for a later date, you must still use 31 October as the scheduled statement day on your statement. The statement and payment cover unclaimed super for:
- members aged 65 or older
- non-member spouses
- deceased members
- former temporary resident members
- small lost member accounts
- insoluble lost member accounts.
For this reporting period, the unclaimed money day is 30 June 2011. You need to determine the unclaimed super accounts your fund held at the end of the unclaimed money day.
The statement creation date is the date on which you prepare the USMS. If you re-lodge your USMS, you must use the new date on which you prepare that USMS.
If you do not have unclaimed super or lost member accounts to report at the end of the unclaimed money day, you must send us an Unclaimed superannuation money non-lodgment advice (NAT 73231) by the scheduled statement day.
You must include the following reason codes on the non-lodgment advice:
- (J) your fund has no unclaimed super (J)
- (K) your fund has no small or insoluble lost member accounts (K)
- (V) your fund has no unclaimed super and no small or insoluble lost member accounts (V).
However, this non-lodgment reporting obligation does not apply to:
- a regulated super fund with fewer than five members
- a state or territory public sector super scheme that reports and pays, by law, unclaimed super money to a relevant state or territory authority
- a section 20C notice for former temporary resident unclaimed super. If you are sent a section 20C notice, you need to lodge the completed USMS in response to that notice and make payment by the scheduled statement day. A non-lodgment advice cannot be used for this obligation as you must report for each individual listed on the section 20C notice.
APRA regulated funds with over four members are required to lodge a Lost members statement (LMS). The ATO uses these biannual lodgments to update the lost members register (LMR), which helps to reunite members with their super.
For the period 1 January to 30 June 2011, you must lodge your LMS on or before 31 October 2011.
For this reporting period, the date of the report is 30 June 2011.
The statement creation date is the date on which you prepare the LMS.
Did you know?
- Where you have no lost members' information to report, you still need to complete the non-lodgment advice questions on the LMS - unless your fund is an APRA fund with fewer than five members. This will ensure that you have met your reporting obligations for the period.
- If you have any lost members with accounts reported and paid to either the ATO or a state or territory authority as unclaimed super, they must be reported as 'transferred' (T) on the LMS.
- If you have a member previously reported as lost or inactive and they have now re-established contact and elected to roll their benefits over to another fund, you must report them as 'found' (F) on the LMS. Where the member is transferred by you to another fund as a lost member (usually to an eligible rollover fund that accepts lost members), you must report them as 'transferred' (T) on the LMS.
- Following the information above will help us to update the lost members register records and display the correct status of members' accounts on SuperSeeker. The availability of accurate data will reduce unnecessary calls to super fund call centres.
All super providers (other than SMSFs) need to lodge an MCS for all contributing members for the period 1 July 2010 to 30 June 2011 on or before 31 October 2011.
Did you know?
A guide to reporting contributions on the MCS has recently been published. The Member contributions statement protocol is a valuable resource that will help you better understand how to lodge accurate and complete MCS data.
Most funds are legally required to lodge both original and amended MCS data electronically. Only funds with fewer than 100 members may use the paper MCS form (NAT 71334).
From 1 July 2011 super fund providers can use their members' tax file numbers (TFNs) as the primary locator to link or locate contributions and rollovers for member accounts.
It is proposed that, by 1 January 2012, TFNs may also be used by super fund providers to help consolidate super accounts whether they are in the same fund or across multiple funds.
Regulations are being developed to support the use of TFNs to facilitate account consolidation. This will include requirements for member consent and other procedures and processes super fund providers must follow before consolidating accounts.
These measures will make it easier for individuals to be reunited with their super, whether it is sitting in a lost account or in multiple accounts across various funds.
If you receive an excess contributions tax (ECT) release authority you must send it to us within 30 days of releasing the money. You must also send a copy to the member, even if the amount is paid to the member or the member has paid the ECT. The statement must still be sent on time and failure to do this may result in possible penalties.
Penalties apply if you do not:
- release the amount within 30 days of receiving the release authority
- send the member and us a release authority statement within 30 days of paying the amount
- release the right amount.
If you intend to re-report a member's contribution, you must report the exact account number and client identifier you reported in the original member contributions statement (MCS). If you change these details, our systems will treat the re-report as a new MCS for the member; this may increase their excess contributions tax.
A common mistake is to add extra zeros on a member account in the original MCS, but not on the re-reported MCS. For example, our systems will process member account 123 and the re-reported member account 00123 as two separate MCS reports.
Excess contributions tax statistics out now
We have recently published an excess contributions tax (ECT) statistical report which outlines the following for the past three financial years:
- number of ECT assessments issued
- value of ECT liabilities
- average and median excess contributions made
- number of applications to disregard or reallocate contributions.
These tables are current as at 8 May 2011 and will be updated approximately three times a year.
The pension drawdown relief has been extended for 2011-12. The minimum payment amounts for account-based, allocated and market-linked (term-allocated) pensions will be reduced by 25% for 2011-12. This reduction will help assist holders of these products to recover capital losses incurred as a result of the global financial crisis.
The minimum payment amounts will return to normal in 2012-13.
A new bilateral social security agreement with the Czech Republic began on 1 July 2011 and removes the issue of double super coverage.
Double super coverage occurs when an employee works temporarily in another country and that country, as well as Australia, requires super guarantee (or equivalent) contributions to be made for the same work undertaken by the employee.
Under the new agreement, employers will not have to make compulsory super (or equivalent) contributions in the Czech Republic, provided they:
- continue making compulsory super contributions under Australia's super guarantee law
- obtain a Certificate of coverage from us.
On 16 June our Small and Medium Enterprises (S&ME) business line hosted a webinar (an interactive online seminar) on the subject of super guarantee (SG) for members of its SME Tax Forum. Two senior topic experts from the Superannuation business line discussed all aspects of SG, including: who should pay, employee and contractor eligibility, working out how much to pay, choice of fund, handy tools and common errors. The half-hour presentation was followed by a very informative question and answer session online.
One thing we discovered was quite a few people are unaware of the online tools and calculators available on our website. These aids can make your job much easier. So, for ready reference here they are:
If you are a business with fewer than 20 employees you may be interested in the Medicare Small Business Superannuation Clearing House. This free service is designed to reduce red tape and compliance costs associated with meeting your SG obligations. Visit the Medicare Small Business Superannuation Clearing House for more information.
Webinars: a free, quick and convenient way to keep up to date with super
Webinars are one-hour sessions run regularly on topics of interest to members of the online SME tax forum. If you have an idea for a super webinar simply email SuperUpdateNewsletter@ato.gov.au with your suggestion and we'll see what we can do.
From 1 July 2011, all collectables and personal use assets purchased by SMSFs will have to comply with tightened legislative standards. These standards ensure the investments do not give rise to a current day benefit and are instead made for genuine retirement purposes.
Assets affected are: artwork, antiques, artefacts, motor vehicles, jewellery, memorabilia, wine or spirits, coins, medallions or banknotes, postage stamps or first day covers, rare folios, manuscripts or books, recreational boats and memberships of sporting or social clubs.
The new legislative standards cover the acquisition, disposal, storage and maintenance of these items. The tightened rules state:
- the item must not be leased to, or part of a lease arrangement with, a related party (a related party includes a member of the fund)
- the item must not be stored in the private residence of a related party
- the item must not be used by a related party
- the decision on the storage of the item must be recorded and kept for at least 10 years after the decision has been made
- the item must be insured in the fund's name
- if the item is transferred to a related party, it must be independently valued.
The measure applies to the acquisition of all new investments of collectables and personal use assets from 1 July 2011. In the case of assets acquired before 1 July 2011, trustees must comply with the new regulations by 1 July 2016 or, alternatively, dispose of the assets.
For further details regarding the new legislative standards, refer to the new legislation page.
For the key dates refer to Super reporting and lodgment dates.
These are the key rates and thresholds which apply in relation to contributions and benefits, employment termination payments, super guarantee and co-contributions. Refer to Key superannuation rates and thresholds.
This section covers new rulings, legislation and law of relevance to super. The information is from the ATO website.
Bilateral agreements - what are my super obligations when my employee is working overseas?
For an explanation of the bilateral agreements between Australia and other countries which affect the super entitlements of employees sent to work temporarily overseas, refer to Bilateral agreements - what are my super obligations when my employee is working overseas?, published 30 June 2011.
Electronic superannuation audit tool
The electronic superannuation audit tool (eSAT) has been designed to help you fulfil your obligations, carry out the annual compliance audit and lodge an auditor/actuary contravention report where required. Refer to Electronic superannuation audit tool, published 5 July 2011.
Transfer of super benefits portability form - information for super providers
For information for super providers about the portability form which allows members to transfer super benefits between funds, refer to Transfer of super benefits portability form - information for super providers, published 11 July 2011.
Draft Taxation Ruling TR 2011/D3 Income tax: when a superannuation income stream commences and ceases
Refer to Income tax: when a superannuation income stream commences and ceases, published 13 July 2011.
Member contributions statement protocol
This protocol has been developed to help super providers and suppliers lodge accurate and complete member contributions information. Refer to Member contributions statement protocol, published 20 July 2011.
The Treasury's Stronger Super website contains an overview of the Cooper review reforms, publications and media releases.
From the Minister
The Assistant Treasurer Minister for Financial Services and Superannuation website contains the latest information about the federal government's role in making the tax and super systems fairer.
Transfer of the administration of early release of superannuation on compassionate grounds
Media release no. 103, Transfer of the administration of early release of super on compassionate grounds, released by the Hon Bill Shorten MP, Assistant Treasurer Minister for Financial Services and Superannuation, 7 July 2011.
99% satisfaction rating for small business superannuation clearing house
Media release no. 94, 99% satisfaction rating for small business superannuation clearing house, released by the Hon Bill Shorten MP, Assistant Treasurer, Minister for Financial Services and Superannuation, 16 June 2011.
20 years of superannuation
Speech no. 28, 20 years of superannuation, by the Hon Bill Shorten MP, Assistant Treasurer, Minister for Financial Services and Superannuation, to Association of Super Funds Australia (ASFA), Superannuation Guarantee Dinner, Parliament House, Canberra, 16 August 2011.
The future of financial advice
Speech no. 25, The future of financial advice by the Hon Bill Shorten MP, Assistant Treasurer, Minister for Financial Services and Superannuation, to the Association of Financial Advisers Luncheon, Sydney, 27 June 2011.
At your service: here to help and look after the interests of small businesses making good and honest choices
Commissioner of Taxation's address to the Council of Small Business of Australia - the NAB National Business Summit, At your service: here to help and look after the interests of small businesses making good and honest choices, Sydney, 27 July 2011.
Taking the profit out of organised crime
Commissioner of Taxation's address to the Serious Non-Compliance conference, Taking the profit out of organised crime, Sydney 23 June 2011.
High performance, high integrity: the identical twins of effective corporate governance
Commissioner of Taxation's address to the Australian Institute of Company Directors, Leaders Edge Lunch Series, High performance, high integrity: the identical twins of effective corporate governance, Hobart, 16 June 2011.
We can see clearly now: growing transparency with large businesses
Second Commissioner Bruce Quigley's address to the Corporate Tax Convention, CTA program, We can see clearly now: growing transparency with large businesses, Melbourne, 7 June 2011.
SuperUpdate is a quarterly electronic newsletter for those working in the super industry. It includes information about issues and changes in the administration of Australia's super system. The newsletter provides summary information and directs readers to other sources for highly technical or more detailed information.
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Last Modified: Monday, 25 June 2012