Beth Barry advised members that there has not yet been a response from government on the Stronger Super consultation process, so there is little to update in this regard.
Update on progress of Funds Road show
As members would be aware, the ATO is running some Road show sessions for industry during November 2011. A number of members have responded to SFWG Secretariat email issued Tuesday 9 August 2011 requesting feedback on the topics to be included in the program, which now looks like.
- An overview of SuperSeeker and the priorities;
- Clarification of Fund involvement and what the consultation process is;
- Scheduling of the proposed changes and the timeline; and
- More details about the account consolidation process.
Members indicated the proposed program topics would be of interest to them and they would be planning to attend their local road show presentation.
The ATO is currently in the process of confirming dates and venues and once we are at a point of issuing invitations, to funds and administrators, we will also issue the invitation directly to SFWG members.
Feedback on administrative design issues
In considering administrative design there are a number of issues we are seeking fund input on.
Reporting of inactive accounts - do members have a perspective on how many inactive accounts have the fund members TFN attached?
The Excessive Contributions Tax caps and balance measure has a requirement for funds to report a balance for all accounts including inactive accounts.
The value of including the inactive account balances will be that these accounts will form part of the individual member's comprehensive (one stop shop) view of their superannuation as displayed on the ATO's Individual's Portal, along with any unclaimed super money held by the ATO.
However, one of our biggest questions is how many of these accounts have a TFN attached.
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Note - for the purposes of this issue, inactive accounts is taken to mean those accounts that are not reported on for member contribution statement (no contributions received), unclaimed superannuation money statement or lost member statement.
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Feedback received indicated that:
- General discussion reflected some confidence that majority of corporate funds had a higher ratio of "inactive" members with TFN
- Retailing based industry funds with high numbers of "inactive" casual part time student employee members have a lower ratio (50%) compared with other corporate or professional based employees (70%)
- Super SA indicated holdings of TFN attached to non reported accounts ('inactive') was approx 70%
- Funds reflected that the inactive accounts without TFN are more likely to be aged accounts (more than five years old).
Several funds advised that reporting of pension accounts would require system development.
Would there be a benefit available if we staggered the due dates for reporting various components of a report over time?
Funds indicated it would be more effective overall to report all rather than to split their reporting over an extended period.
What value is there to a fund's account consolidation activities in extending the SuperMatch facility to display all accounts (other than lost and unclaimed) of an individual?
Funds generally did not support this extension to the SuperMatch facility, with or without a balance. Robert Hodge highlighted that industry has real concerns with funds being able to search another fund for members.
SuperSeeker Portability form expansion
With the expanded view of Individual's portal, the ATO is considering extending the scope of the SuperSeeker portability form to enhance the consolidation of a member's accounts by allowing the individual member to request rollover of all accounts with one form. The form would be sent through to fund where all member accounts will be rolled over, for that fund to request the rollovers.
Members were advised this represents a change to current arrangements; would it present any difficulty?
General discussion highlighted fund concerns with the POI requirements each fund would stipulate in order to process the fund claim to roll over the member's account. The view was expressed that the majority of funds would resist actioning the request without the provision of POI evidence.
The ATO highlighted that discussions with Attorney Generals Department (AG) is that their view is there is no requirement to do a full blown POI check. AG view is that POI involves a risk assessment process fund trustees need to determine the appropriate response.
Robert Hodge expressed the view that legislative change to the Superannuation Industry Supervision Act was required to facilitate this. The change would need to have the effect of if an APRA regulated fund says in the request of a rollover on behalf of a member that POI has been verified, then another APRA regulated fund can rely on that verification. This type of legislative change will relieve the fund trustee of their responsibility under common law.
Nominations for Stronger Super Fund Reference Group
As mentioned previously, the ATO is looking to establish a Super Reforms Working Group which as a standing working group, we can refer issues to as they arise. The group is expected to be limited in size to about 10 across the various superannuation fund types and administrators.
Funds supported the ATO proposal to write to members organisations outlining:
- the purpose of the group;
- the level of input required and the time commitment anticipated;
- the industry segments that should be represented;
- the balance of skills and capabilities required (e.g. IT, compliance, understanding of business processes, etc).
Action item
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07092011/07
Members seeking to include a representative from their organisation as a participant in the Super Reforms Working Group are requested to email SFWGSecretariat@ato.gov.au with the details of the appropriate officer that the ATO should correspond with to seek an appropriate nomination.
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Responsibility
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SFWG members
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Status
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Completed
15 nominations were received and escalated by SFWG Secretariat. Invitations have been issued to organisations in the week commencing Monday 26 September 2011.
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Sections within Agenda items
Last Modified: Monday, 4 June 2012