SASG minutes August 2014
Rooms 719 & 720, Level 12, ATO Latitude East, 52 Goulburn Street, Sydney NSW 2000
Wednesday 27 August 2014
Contact and Secretariat:
08 8218 9460
Alan Harvey AAS
Andrea Cooper Financial Synergy
Anna Turpie Mercer
Anne Dixon Precision Administrative
Garry Powell Super SA
Heide Stewart IOOF
Ian Roberts NAB / MLC
Jayne O’Ryan Qsuper
Jun Tang Onepath
Karen Downes Superpartners
Maria Anislag Zurich
Martin Mikulicin Bravura Solutions
Mary Gale Syncsoft
May Low CBA (Colonial First State)
Neil McMillian Pillar
Scott James Comsuper
Simone Sluchniak GESB
Sue Pearce Future Plus Financial Services
Suresh Soppa CBA (Comminsure)
Tina Cifelli AMP
Carolyn Harris ATO – CAS, Superannuation
Colleen Gibson ATO – SuperStream, DSec
David Jordan ATO – CAS, Superannuation
Ian Colhoun ATO – SuperStream, DSec
Louise Elliott ATO – Superannuation
Phillip McDonald ATO – CAS, Superannuation
Shari Betts ATO – CAS, Superannuation
Shaun Ferabend ATO – CAS, Superannuation
Victoria Hopley ATO – CAS, Superannuation
Amanda Gunn Mercer
George Strilakos UniSuper
Graeme Colley SPAA
Kelly Kerr BT
James Barnwell Russell Investments
Rebecca Scott Perpetual Investments
Robert Hodge ASFA
John Shepherd ATO – CAS, Superannuation
Linda Cheesman ATO – CAS, Superannuation
Louie Markovski ATO – CAS, Superannuation
Mary Arrowsmith ATO – CAS, Superannuation
Sally Druhan ATO – CAS, Superannuation
Wednesday 26 November 2014.
Please note: SASG agendas, minutes and related papers are not binding on the ATO or any of the other bodies referred to in these papers. While every effort is made to accurately record views expressed, the wording necessarily represents a summary of statements of general position only, and care should be taken in interpreting those statements. These papers reflect the position at the date of release (unless otherwise noted) and readers should note that the position on any issue may subsequently change.
Steve Fellows (Assistant Commissioner, Client Account Services, Superannuation and Accounting) opened the meeting welcoming all in attendance including new representatives and guest attendees.
Declaration of Conflicts of Interest
The Chair advised members of the requirement to declare any conflict of interest or conflict of role. No declarations of conflict were advised.
28 May 2014 SASG Minutes endorsed
Final minutes of this meeting sent by SASG Secretariat email 16 July 2014 were accepted without change.
2 Review of outstanding action items
04122013/16 – Investigate and advise members on required treatment on individual entitlement paid by the ATO to a non-compliant MySuper employer default fund.
Closed – 27/08/2014 – The item has been taken off line, pending clarification of Treasury and APRA’s position on the correct treatment funds should apply in regard to a contribution paid by the ATO where MySuper arrangements are not in place.
ATO liaison with Treasury and APRA continues and additional guidance advice will be provided once clarification is available.
12032014/19 – ATO to review fund claim process and procedure to determine process improvements that expedite the fund claim process.
Completed – 20/08/2014 – Fund specific issues with membership transfer being resolved by CAS Super Product Management and CAS Super Delivery.
28052014/12 – ATO to provide timeline for release of the Notice of intent to claim or vary a deduction for personal super contributions in NAT format.
Closed – 27/08/2014 – Members were advised that the timeframe for publishing the NAT form is October 2014.
Funds can continue to use the version currently published. Changes from that form will be instruction changes only. Data fields will not change.
A summary of all action items was distributed by SASG Secretariat email on Monday 24 August 2014.
3 Updates on ATO Systems (ICP)
Shaun Ferabend (Director, CAS Superannuation) updated members on a number of ongoing issues with Unclaimed Superannuation Money (USM) processing in the ATO enterprise wide system (ICP).
3.1 ATO-held USM rollovers to funds
The weekly rollover process has been on hold since mid-June due to a Rollover Benefit Statement (RBS) correspondence integrity issue. The required system fix to remedy this issue has been tentatively scheduled for implementation from mid-October 2014.
Given the burgeoning backlog of aged rollover request workflow, increasing flow of complaints, and impacts for industry of further delays, the ATO outlined a range of options to recommence rollover processing earlier.
- Members supported the ATO proposal to recommence the rollover process based on the ATO:
- expanding the existing CRT USM Rollover Notification email to include the RBS correspondence “Our reference” field
- confirming legislative requirements (ATO and APRA) of the Fund to process the ATO rollover is limited to the requirements of Section 18C, Superannuation (Unclaimed Money And Lost Members) Act 1999, and
- notifying relevant stakeholders of the potential breach of requirements including applicability of any ATO general interest charge (GIC), given the backlogged workflow, and the extensive manual processes required to allocate.
- ATO to review outcomes of the release of the backlogged requests to determine when the next rollover to funds will be run, before resumption of routine weekly rollovers.
- A CRT Alert will be issued at the earliest opportunity to notify funds of the details of the rollover recommencement.
Due date: 8 September 2014
Issue CRT Alert notification of recommencement of USM rollovers outlining release date of backlogged requests, issues impacting the RBS, and recipients processing timeframe obligations.
Post-meeting update: CRT Alert 065/2014 second update issued Wednesday 24 September 2014 advising funds that rollover remittance process would be released from week commencing Monday 29 September 2014.
3.2 Reconciliation of Superannuation Account Statement of Account (USM SoA)
The ATO is progressing reconciliation of a number of fund accounts impacted by conversion of legacy system data to ICP accounts.
Feedback from a number of members confirmed issues for specific funds in reconciling their USM SoA continue. It was agreed that funds should escalate issues with USM SoA reconciliation to SuperCRT@ato.gov.au on a case-by-case basis for follow up action to be undertaken.
Given the majority of funds impacted by the reconciliation issues have a debit balance, repayment of specific member USM amounts can’t be easily facilitated.
- were reminded not to lodge amending USM statements to attempt to obtain a refund for a specific member correctly paid as USM
- highlighted the difficulties experienced with directing dissatisfied individuals to access the electronic portability form (Individuals Portal) to rollover USM back to the fund.
Identify mechanisms for funds to obtain a refund of an individuals’ interest paid to the ATO as USM in circumstances where:
- the individual is unable to use the Individuals Portal
- it is not in the best interest of the fund or the individual to use the Individuals Portal.
3.3 Section 20C Notifications
- Period ended 31 December 2013 Notice – issued late in April 2014.
The ATO reminded members that late paper notifications for this period which funds have not yet actioned, should be reported (and paid) by 31 October 2014, with a statement due date of 31 October 2014.
- Period ended 30 June 2014 Notice – statement due date 31 October.
As advised in CRT Alert 049/2014 issued 23 July 2014, due to issues impacting the release of notifications in electronic format, the ATO would delay issuing a notification for the period ended 30 June 2014.
The next notification is expected to issue electronically in February 2015 for the periods ending 30 June 2014 and 31 December 2014, with a statement due date of 30 April 2015.
4 Product Update
Louise Elliott (Director, Superannuation, Individuals and Funds segment) discussed the following issues:
4.1 Excessive Contributions Tax (ECT)
- Fairer Treatment of Excess Concessional Contributions (FTECC).
This new concessional measure applies to 2013-14 financial years and beyond.
- The ATO is about to commence the issue of assessments to individuals and funds can expect to start receiving FTECC release authorities from October 2014.
- Key features of the measure and a copy of the Release Authority has been provided in CRT Alert 024/2014 (reissued to members 26 August 2014). More information can be found at Super contributions - too much super can mean extra tax
General discussion by members highlighted concerns regarding:
- seven day processing timeframe, and
- limitations in releasing monies from specific account types, for example account-based pensions.
ATO to provide advice on any specific account types/products funds are not able to release an FTECC liability form.
Post meeting update: SASG Secretariat email issued 26 September 2014 provided response to this action item.
- Refund of Excess Non-Concessional Contributions (RENCC).
Legislation for this May 2014 Budget announcement is not been tabled. The measure will give individuals the option to have their excess non-concessional contributions refunded from their superannuation account, along with associated earnings for the 2013-14 financial year onwards.
- The ATO is working on the detail of how it will work and have put ECT assessments for 2013-14 contributions ‘on hold’ until the law is confirmed.
- Some of your fund members waiting on an assessment for 2013-14 financial year may be impacted. We are assessing the feasibility of contacting impacted taxpayers.
- Feedback on proposal to move the FTECC Release Authority (RA) to SBR environment from mid-2015.
Against the background of the seven day timeframe for funds to process RAs, feedback included:
- electronic distribution from ATO to Fund and Fund to ATO preferred
- should incorporate all RAs including ECT/RECC and voluntary/compulsory RAs
- need to ensure that there is no conflict with industry implementation of the contributions standard
- cost imposts on funds to build would be exacerbated if there were changes to law, and minimised should there be a move to a generic format for RAs
- more information on RA volumes overall moving forward may assist industry in assessing the viability.
- Status of 2012-13 and prior year ECT and RECC assessments:
- Normal processing for these ‘old’ measures is still coming out in batches.
- Good progress is being made to clear the backlog of ‘old’ cases in the system prior to 1 July 2013 and cases delayed by system issues in late 2013.
- Approximately 25,000 individuals still require an ECT assessment or refund (RECC) offer for 2012-13 and prior financial years – due to peak SMSF annual return lodgment in May 2014 (when we received their 2012-13 financial year contribution information).
4.2 Division 293 Tax (Div 293)
- Defined Benefit Assessment correspondence for 2012-13 financial year.
Members were appraised on progress with redesign of this correspondence:
- The ATO ceased issuing 2012-13 financial year assessments due to feedback of the associated correspondence pack.
- Work is underway to deliver a more contemporary product including a review of the Release Authority process.
- A short-term simpler ‘plain English’ version will be used when the ATO recommences issuing approx. 2,500 assessments in September/October 2014.
Accumulation fund assessments are expected to issue from November 2014.
- Deferred Debt Account (DDA) correspondence to be issued to funds (Defined Benefit accounts only).
Member input was sought in relation to the timing of releasing the Deferred Debt Account letters given:
- ATO delays issuing these notices
- Actuaries Institute of Australia is yet to publish guidance on how to calculate the end benefit cap amounts.
General discussion led to a commitment by the ATO to conduct a post-meeting teleconference to discuss this issue further.
Post-meeting update: This meeting was held Thursday 4 September 2014. CRT Alert 060/2014 issued Monday 8 September advised:
- the ATO has commenced issuing the Deferred Debt Account letters
- the ATO acknowledges some funds will require additional time to calculate end benefit amounts and confirms an extension of time until 12 November to lodge the end benefit notice.
4.3 Low Income Superannuation Contributions (LISC) Repeal update
Members were updated on the progress of the repeal of LISC:
- The ATO has commenced payment of LISC for approximately 600,000 individuals that do not have an obligation to lodge or have not yet lodged an income tax return for the 2012/13 financial year.
- Based on the law as it stands, the ATO expects to commence payment of LISC from October 2014 for eligible individuals, based on 2013/14 financial year lodgment of:
- member contribution statements
- income tax return lodgment.
Post-meeting update: Post-meeting parliamentary outcomes have clarified the government’s intention to continue with the payment of LISC entitlements until the 2016/17 year.
5 Reuniting Super update
Shaun Ferabend provided members with a brief update on strategies to reunite individuals with their super.
Members were reminded of the overall reduction of Lost Member Register (LMR) holdings over the last 3 years - 3.4M accounts in 2011/12 to 1.7M in 2013/14 as recently published.
Some of the recent more strategies contributing to the reduction include:
- Publishing lost money holdings by postcode – this gains significant media coverage increasing the community’ s awareness of lost super
- Lost member provision of address process run twice a year - 2013/14 process delivered 1.7M updated addresses for accounts worth $11.8M across 181 funds.
- Lost member email/SMS campaign over June/July 2014 utilising a more contemporary email/SMS communication - 78,000 clients with lost super greater than $2,000 without any ATO-held money drew an initial response of 3,400 (4%) members submitting an Electronic Portability Form (EPF) through the Individuals Portal. Further responses are expected when we undertake our follow-up activity.
- myGov account platform has provided individuals to the opportunity to look at their superannuation memberships, leading to an unprecedented response to consolidate their superannuation accounts, including lost accounts:
- 1.9M individuals have linked their myGov account of the ATO and approx. 1.5M have already lodged their return electronically.
- 100,000 individuals have consolidated their superannuation account through use of the EPF in the first two months of this year compared to 150,000 for all of 2013/14.
Feedback from members highlighted several examples of issues with LMR reporting including:
- pension account reported for MCS purposes now reported as ‘lost’
- campaign issues -specific members’ own account incorrectly included in ATO email/SMS campaign
- provision of address (POA) --issues raised included concerns with the accuracy of ATO matching including phonetic matching. Examples have been provided previously (Suresh Soppa) and further examples provided by Anne Dixon.
Review examples of:
- irregularities in member accounts being reported as lost or included in LMR campaign activities, and
- ATO matching process issues impacting LMR PoA integrity.
Feedback from members on their experience with the increased EPF workflows highlighted current known issues with:
- duplicated context ID – this issue has been experienced on an ad-hoc basis by some funds since January 2014 increasing in a rate commensurate with the increased EPF workflow. Post-meeting update – this issue (duplicate and then invalid context ID) has been resolved; CRT Alert 061/2014 third update issued 12 September 2014.
- a separate duplicate issue identified is caused where a fund has reported a member’s account for MCS purposes with a specific account number but in subsequent reports (MCS or lost member statement) the account number reported is different, creating the duplicate EPF error for members attempting to consolidate that account.
Provide advice on resolution of EPF duplicate member account error.
Members expressed concerns regarding the ATO decision to cancel the planned LMR full re-report scheduled for May 2015.
Concern exists regarding:
- the ongoing degradation of the integrity of the register given requirement for funds to report biannually on an incremental basis
- the likely timeframe to deliver changes to incorporate an integrated fund member statement reporting contributions, unclaimed and lost account status.
6 MR4, MR5 and MR6 design update
Ian Colhoun (Director, SuperStream, Data Standards and e-commerce) provide members with an update as outlined in a PowerPoint handout.
6.1 Upcoming ATO major IT releases in December 2014 and 2015 (EPF, contributions and rollovers)
- The inclusion of funds primary ‘Unique Superannuation Identifier’ (USI) on Member Contributions Statements (MCS) and fund nomination advice update of all our account destinations for payments and rollovers for Standard Business Reporting Release 2.0 (SBR2) environment:
- January 2015 – EPF will be issued through SBR2 gateways with the USI sourced from the latest 2013/14 financial year MCS lodgment
- January 2016 – adoption of the SBR2 platform for ATO sourced contributions and rollovers and payment at USI level
- December 2016 – fund member reporting changes.
- Electronic Portability Forms (EPF) SBR 2 implementation.
- Industry feedback on the EPF guidance note closes 2 September 2014. Key changes to the ‘Initiate Rollover’ transaction include
- the service action in ebMS header will be ‘EPF’ to distinguish this transaction is from the ATO
- funds will not be sending error messages back to the ATO; you will contact members to resolve issues impacting the rollover request.
- Key implementation challenges include
- Where the ‘Initiate Rollover’ transaction implementation process has removed the service action data from the message, the fund will not see that the rollover is from the ATO.
- SMSFs are not required to have a USI; not acknowledged in guidance material.
- The use of parallel channels (ECI and SBR2) to deliver EPF messages will not work. The ATO is consulting with and listening to industry on how to mitigate risk on this issue. We expect to confirm our position in September 2014.
- Further discussion focussed on the inclusion of USI by the ATO in the EPF request (given it is not mandatory for the individual to include), and circumstances when the ATO would populate a secondary USI for the request for example where a fund has end-dated their latest USI.
Members highlighted frustrations in dealing with other funds in regard to accepting initiate rollover requests, providing a USI, or rejecting USI including legacy system difficulties.
Members were advised both the ATO and APRA are receptive to intelligence regarding the difficulties funds experience.
- ATO sourced contributions and rollovers.
ATO design work is continuing to map detailed design for changes.
- Challenges include mapping the ATO contribution into the contributions standard.
- The pattern of using the Service Action field contained in the ebMS (to notify the product payment being paid for example co-contributions, LISC, USM, etc.) will be continued.
- Error messaging for the fund will need to be implemented (replacing PVAs).
Frequency of payments for products is expected to increase with smaller files sizes, however the workflow spike to funs associated with payment triggers intersecting will continue for example MCS lodgment and income tax return information will trigger peak payments in November.
6.2 Design for fund member reporting changes for the 2016-17 financial year
ATO internal design is underway looking at opportunities within ATO reporting framework with a view on reducing the reporting burden and alignment with industry transactions and processes.
Engagement has commenced with:
- industry through consultation with the Superannuation Industry Relationship Network (SIRN) in September 2014.
Reference was made to the case studies mentioned in the handout outlining the potential for natural transactions being the trigger event to rollover a member interest rather than the current bi-annual report and payment requirement (a calendar event).
6.3 SuperTICK update
Standard Business Reporting Release 2.0 (SBR2) implementation of SuperTICK has been pushed back to December 2015 (from July 2015). Given the delay of SuperTICK SBR2 implementation, funds may determine value exists in implementing SuperTICK SBR1 version 2 (implementation in December 2014).
Benefits provided by version 2 are:
- TFN will be an optional field
- new member accounts will allow USI to be passed
- ATO may return the individuals TFN where is has been previously quoted in the system for superannuation purposes
- SuperTICK version 1 will be turned off at the implementation of SuperTICK SBR2 in December 2015, while SuperTICK SBR1 version 2 (December 2014) will be maintained beyond December 2015.
A member reported incidents where SuperTICK requests to create a new member account is not successfully creating a new member account displayed on the Individual Portal (SuperSeeker).
Review incidents where SuperTICK validation process requests to create a new member account have been unsuccessful.
6.4 Fund Validation Service (FVS)
Feedback on the transition to SBR2 version of the FVS is that the planned eight week transition is not sufficient. The ATO is interacting with funds to ascertain the length of maintaining the transitional FVS.
7 Data standards and e-commerce update – contributions induction
Colleen Gibson (Director, SuperStream, Data Standards and e-commerce) updated members on progress with the contributions induction process, which includes the first employer cross-certification.
The ATO publishes progress with the SuperStream contributions standard induction process regularly. Members are encouraged to access the link provided for information on the contribution induction timetable, group updates, industry nerve centre updates and key learnings.
SuperStream induction process
The induction process will continue through to the end of November, ensuring most APRA funds receiving contributions and the larger sending solution providers are ready:
- a streamlined induction process is being developed to ensure funds receiving contributions will be ready for implementation from 3 November through to mid December 2014.
- those not expecting to be ready need to notify:
- the ATO SuperStreamStandards@ato.gov.au by 30 September 2014 of a nominated date (no later than 30 June 2014) they will be ready, and
- employers using the fund as a default provider.
Funds experiencing issues with contributions payments being incorrectly sent to their rollover bank accounts (as published on the FVS) from clearing houses, etc., should notify SuperStreamStandards@ato.gov.au of the details.
FVS terms and conditions of use can be found at:
Fund validation service terms and conditions
8 Other business
8.1 Member Contribution Statement (MCS) V10 and ATI Portal performance
Members were asked to escalate to SuperCRT@ato.gov.au any issues with:
- MCS v10 lodgments since resuming lodgments from 3 August 2014 (as per CRT Alert 39 Update issued 15 July 2014).
Jayne O’Ryan will provide an example to SASGSecretariat@ato.gov.au of a validation issue on prior year amendments.
- ATO Portal/File Transfer Functionality performance
Escalate any notable performance issues with details using key words ‘ATO Portal performance’.
Supplementary instructions issued in June 2014 advised funds unable to report ‘defined benefit contributions’ in the MCS 2013-14 financial year by 31 October 2014, could provide amended reporting of this value by 31 January 2015. Members were asked to notify the SuperCRT@ato.gov.au at their earliest convenience where it was identified this timeline could not be met.
Sue Pearce queried whether there was any intention to amend the member account number and client identifier limitations of the MCS specification in line with limitations outlined with the Lost Member Register specification. If such a change was implemented all prior year MCS amendments using identical values in these fields will reject.
8.2 Gender guidelines – ATO request for information
Shaun Ferabend outlined the ATO requirement to comply with guidelines for Australian Government departments and agencies on the collection, use and amendment of sex and/or gender information in individual personal records.
SASG Secretariat email is issuing Thursday 28 August 2014 seeking member input to understand the potential impact for funds of any changes implemented. Members are asked to respond by Friday 12 September 2014.
8.3 Matrix of Release Authorities (RA) and fund types monies can be released from
Alan Harvey and Sue Pearce requested assessment of a draft matrix they have developed to provide guidance on the types of super funds or plans, etc., can release moneys in accordance with the various release authorities received.
Provide draft matrix of release authorities and fund types monies can be released from to SASGSecretariat@ato.gov.au
8.4 TFN Notification – Section 299 (Sec299)
Several members reported issues with Sec299TA notices being issued for incorrect members or to incorrect funds. Where funds identify similar examples, escalate those examples where the individual is not a member of the fund receiving the notification to SASGSecretariat@ato.gov.au
8.5 CRT email receipt acknowledgment process
Funds expressed concern with timeframes for resolution of certain issues and the lack of an email response to acknowledge receipt of email.
The ATO undertook to assess implementing an email acknowledgment of receipt.
Steve Fellows thanked all attendees for their contribution to a very successful meeting. The next meeting is scheduled for Wednesday 26 November 2014.