• SASG minutes August 2015

    Meeting details

    Venue:

    Rooms 719 & 720, Level 12, ATO Latitude East, 52 Goulburn Street, Sydney NSW 2000

    Date:  

    Wednesday 26 August 2015

    Start:  

    09.30am

    Finish:  

    2.15pm

    Chair:  

    Cathy Cox

    Contact and Secretariat:  

    Phil McDonald

    Contact phone:  

    08 8218 9460

    Attendees

    AMP

    Tina Cifelli

    ASFA

    Fiona Galbraith

    Bravura Solutions

    Martin Mikulicin

    BT

    Kelly Kerr

    CBA (Colonial First State)

    May Low

    CBA (Colonial Mutual)

    Ari Gerasimou

    Commonwealth Superannuation Corporation

    Peter Zorbas

    Commonwealth Superannuation Corporation

    Scott James

    Financial Synergy

    Andrea Cooper

    IOOF

    Heide Stewart

    IOOF

    Julie Orr

    Link Group (AAS)

    Alan Harvey

    Link Group (AAS)

    Sue Pearce

    Link Group (GESB)

    Sharan Panton

    Link Group (Super Partners)

    Karen Downes

    Link Group (Syncsoft)

    Mary Gale

    Mercer

    Amanda Gunn

    NAB

    Ian Roberts

    Perpetual

    Kathy Calman

    Pillar

    Louise Hemar

    QSuper

    Rebecca Mallett

    SMSF Australia

    Graeme Colley

    Sunsuper

    Anne Dixon

    Sunsuper

    Warren Ramage

    SuperSA

    Gary Powell

    Unisuper

    George Strilakos

    Zurich

    Ryan O’Moore

    ATO CAS Super

    Cathy Cox

    ATO CAS Super

    Deb Heffernan

    ATO CAS Super

    Linda Cheesman

    ATO CAS Super

    Louie Markovski

    ATO CAS Super

    Phil McDonald

    ATO CAS Super

    Shaun Ferabend

    ATO, Super Data Standards and ecommerce

    Ian Colhoun

    ATO, Super Data Standards and ecommerce

    Tracie Crowden

    Apologies

    GESB

    Lesley Walker

    Onepath

    Jun Tung

    QSuper

    Jayne O'Ryan

    Zurich

    Maria Anislag

    Perpetual

    Rebecca Scott

    ATO Super

    John Shepherd

    ATO Super

    Louise Elliot

    ATO Super

    Nicole Dykstra

    Next meeting

    Tuesday 10 November 2015

    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.

    Agenda Items

    1 Opening

    Cathy Cox (Assistant Commissioner), Client Account Services, Superannuation and Accounting) opened the meeting:

    • Welcomed all in attendance including new representatives and guest attendees.
    • Accepted that no declarations of conflict of interest were advised.

    27 May SASG Minutes endorsed. Final minutes of this meeting sent by SASG Secretariat email on 6 January 2015 were accepted without change.

    2 Review of Action items from previous meeting

    All action items from previous meeting have been actioned as advised by SASG Secretariat email distributed on Monday 2 February 2014. No further questions or issues were raised.

    3 ATO co-design workshop – 'Reinvention of APRA fund experience'

    This agenda item did not proceed. It is expected that the update will be provided at the next SASG meeting scheduled for Tuesday 10 November 2015.

    Members were advised to ensure they reference the presentation materials circulated by the SASG Secretariat email on Tuesday 26 May 2015 and direct any questions through to SASGSecretariat@ato.gov.au.

    You can obtain a copy of the presentation by contacting the SASGSecretariat@ato.gov.au.

    4 CRT interactions workshop

    Linda Cheesman (Director, CAS Super Product Management, Client Services) provided members with a brief overview of the work undertaken since the 27 May 2015 workshop on the 'ATO Reinvention - improving the APRA fund experience'.

    The purpose of the CRT interactions workshop was to assist the ATO in development of the ATO Service Commitment Framework in relation to APRA funds by:

    • capturing intelligence on key enquiry types and gaining insight of industry’s expected/required timeframe for resolution
    • looking at what is the best method to achieve this and what common practice or principles will need to be considered.

    Key outcomes from the workshop included:

    • Fund acknowledgment that the improvements being sought related to the timeliness, rather that the quality or accuracy of the responses provided.
    • Input from industry of the key enquiry types, priority and preferred resolution timeframe of CRT interactions, grouped into key themes:
      • member issues
      • fund reporting issues
      • ATO rollover and contributions issues.
       

    The key focus was to improve the way the ATO shares information and communicates with funds leading to opportunities for CRT to provide a more personalised and assisted service, by developing a:

    • more effective triage process
    • tracking reference number specific to CRT workflows
    • prioritisation process.

    A tailored framework based on the prioritisation process which assist the ATO in providing funds with an update and timeframe for resolution of their queries, thereby improving the service standard for handling fund queries.

    Members were thanked for their active contribution.

    5 Product Update

    5.1 Unclaimed superannuation money (USM)

    Shaun Ferabend briefed members on progress in resolving a number of key irritants.

    5.1.1 Section 20C notification

    Notifications released electronically from Thursday 23 July 2015; more than 12 weeks prior to the due date of 2 November 2015.

    5.1.2 Delayed ATO held USM claim for payments

    As reported in recent meetings, the ATO continues to work through to resolution, delayed claims for payment (approximately 45,000) from individuals lodging an EPF form to rollover ATO Held USM to their fund of choice.

    A work-around has been implemented and the release of delayed payments commenced earlier in August 2015, and will be issued progressively over the next two to three rollover payment processes.

    5.1.3 Increase in the USM lost member account threshold

    Legislation to increase the threshold from $2,000 to $4,000 effective for the period ended 31 December (due 30 April 2016) is still to be passed.

    5.2 Release Authorities:

    1 Fairer Treatment of Excess Concessional Contributions (FTECC)
    2 Refund of Excess Non-Concessional Contributions (RENCC)
    3 Division 293

    Louie Markovski (Director, CAS Super Product Management, Client Services) acknowledged the volume of FTECC, RENCC and Division 293 Release Authorities recently issued to funds during the late July 2015 / early August 2015 due to ATO system and process issues, and the challenges this presented to industry to action within the legislative time frame.

    Members were appraised on:

    • current holdings (relatively low volumes)
    • projected workflow volumes in the short term for FTECC and RENCC determinations and Division 293 assessments issued to individuals. Preliminary findings reflect 40% of individuals are taking up the offer to elect a release from their superannuation account resulting in a Release Authority Statement (RAS) being issued to funds.

    It was highlighted that a high exception rate is being experienced by the ATO when processing returned RAS due to particular action from funds. Members were asked to ensure fund processes do not cause the RAS to cease processing. Common issues include:

    • providing incomplete RAS (e.g. no fund ABN)
    • substituting the RAS with a single page correspondence
    • the usage of fund personalised RAS that do not comply with the ATO approved version
    • the inclusion of a cover letter to accompany the RAS
    • providing correspondence advising a member has left the fund, rather than complete the appropriate Section within the approval RAS.

    Members were reminded that while FTECC release authorities are legislatively required to be processed and paid within seven days, where a fund has made a reasonable effort to comply with the legislative requirement, but do not, the ATO will apply a practical risk based approach in applying administrative penalties.

    5.3 MCS lodgment 2014–2015 peak period

    Members were advised to ensure they reference the briefing note issued, for any or to obtain a copy, email SASGSecretariat@ato.gov.au.

    5.4 ATO Services Update - SuperTICK

    Members were advised to ensure they reference the briefing note issued, for any or to obtain a copy, email SASGSecretariat@ato.gov.au.

    6 Release of the Large Diagnostic Reports and Industry Results

    This agenda item did not proceed. It is expected that an ATO Teleconference will be organised in October to address the issues raised in the briefing note.

    Members were advised to ensure they reference the briefing note issued, for any or to obtain a copy, email SASGSecretariat@ato.gov.au.

    7 Reuniting super strategies

    Shaun Ferabend briefed members on key reuniting strategies.

    7.1 Reuniting campaigns

    Ongoing monthly email, SMS and letter campaigns are targeting individuals with ATO held money, we are requesting them to provide a valid fund account destination. Our target audience for the 2015/16 campaign covers 370,000 members.

    Response rates to these campaigns are relatively low, and funds have not reported any significant increase to call centre traffic that can be attributed to these campaigns.

    7.2 Lost members register (LMR) – provision of address (POA)

    Outcomes from the 2013–14 year POA processes are 1.4 million accounts valued at $12.4 billion have been updated, resulting in a reduction of 400,000 accounts valued at $3.5 billion (29%).

    The next POA release is scheduled for January 2016.

    Some representatives highlighted data matching issues as an impediment to complete adoption of the POA data in updated member accounts.

    7.3 SuperMatch 2 (SMAT)

    SuperMatch 2 Conformance Suite documents were published in July 2015, for implementation from November 2015.

    7.4 myGov and EPF Data

    Take up rates of these accounts and services are:

    • 3.9 million myGov accounts linked to the ATO as at 17 August 2015 (3.4 million as at May 2015).
    • myGov has been enhanced; there is a new personalised home page tailored to the individual, highlighting any key tax messages with prompts to check your superannuation.
    • EPF usage by individual to consolidate their superannuation accounts has increased significantly:
      • 2013–14 year - 153,000 accounts valued at $765 million; July volume - 9,300 accounts / $39 million;
      • 2014–15 year - 450,000 accounts valued at $2 billion; July volume - 61,000 accounts / $241 million;
      • 2015–16 July volume 116,000 accounts / $461 million.
       

    8 SuperStream Update

    Ian Colhoun (Director, Data Standards and E-commerce, Superannuation) provided members with an update as outlined in the power point presentation.

    You can obtain a copy of the power point presentation by contacting the SASGSecretariat@ato.gov.au.

    8.1 2015 Changes for Standard Business Reporting (SBR2)

    8.1.1 Fund Validation Service (FVS)

    Fund Trustees and administrators were reminded:

    • Fund trustees are required to update the FVS with any changes to product details at least 10 business days before the change is effective. While the FVS does not apply a 10 day requirement, the ATO is monitoring trustee behaviour and compliance with this time frame, and will make contact as required.
    • The best practice is to provide new USI, or changing critical data, such as bank accounts or endpoint service addresses updates at least 28 days before they become effective. This allows sufficient time for gateways and clearing houses to ensure their systems are updated to reflect these changes and superannuation rollovers and contributions are sent to the correct destination.
    • When end-dating a USI, ensure sufficient time is allowed for that USI to receive transactions from employers, clearing houses and superannuation funds that may be already be in progress.

    8.1.2 Electronic Portability Form (EPF)

    Key messages included:

    • cut over to SBR2 channel occurred from Monday 31 August 2015
    • contingency to access forms through the Portal subject to ATO instructions
    • the ATO is liaising with APRA regarding any instances requiring the use of the contingency arrangements.

    8.1.3 SuperTICK

    SuperTICK changes in November 2015 will allow funds to notify the ATO when a member account is closed. This change will improve the quality of the ATO client register stopping the ATO from paying the fund a member contribution or rollover to a closed account. This transaction will be optional at implementation but will become mandatory from November 2016.

    8.1.4 EmployerTICK

    The provision of a corrected TFN (when the TFN quoted is not valid) will resolve a number of downstream difficulties for funds accepting employer contributions without a validated TFN.

    8.1.5 SuperMatch 2 (SMAT)

    Trustees considering engaging with this SBR2 channel (from December 2015) will require ebMS licensing and capability, or an intermediary that has the ebMS capability.

    SuperMatch2 will display all member accounts and return any ATO held money through the current ATO contributions and rollover processes.

    8.2 Update on rollovers and contributions changes for 2016–17

    Members were updated on progress with range of range of issues requiring resolution that were identified at the time of SuperStream Reference Group sign-off of deployment dates for:

    • rollovers - October 2016
    • contributions - April 2017.

    Consultation on these issues highlighted the need for the ATO to revisit the design principles to achieve alignment of government with Industry Data Standards and to carefully manage the scope of change, to minimise the cost, enabling industry to adopt the changes.

    The update encompassed a number of agreed items of change:

    • Follow the fund - account closures and destination activities will be facilitated in the Member Information eXchange (MIX) process
    • Service/action combinations - the proposed design was generally accepted to support G2B And B2G transaction.
    • Payment reference numbers - the agreed position is still being reviewed by the ATO due to feasibility concerns with the design.
    • Rollover amendments - it was agreed for rollover amendments to remain out of scope
    • Transaction reference number (TRN) - Initial industry feedback on the ATO proposal to introduce a TRN for Contributions highlighted significant concerns; consultation on the TRN design for contributions is expected to commence in September–October 2015.
      A TRN will not be included for rollovers.

    General discussion around the use of the existing ATO Contribution Reference Number (CRN) and reconciling statement of account highlighted industry concerns with reconciliation included:

    • current ICP accounts and issues with balances migrated from legacy systems that have not yet been resolved
    • movement into the new rollovers and contributions environment without resolving current system reconciliation issues.

    A number of additional scope items for change that have been agreed to include:

    • Involuntary Superannuation Account Transfers (ISAT) protocol - the scoping document will be amended to incorporate ISAT protocol, which will allow trustees to make common sense decision about whether to use the MIG.
    • BIPs - this supports the SuperStream Technical Committee (SSTC) recommendation to formalise existing processes.
    • Error Handling Response Messaging Pilot - an ATO pilot in late August–September may result in changes around Schedule 6 and error codes and content.
    • USM inbound Changes - two data elements need to be incorporated into the Rollover message.

    Rollover industry implementation plan/cutover Members were stepped through the key releases in events during 2015–2017 Feedback on the plan should be directed through to SASGSecretariat@ato.gov.au.

    Next steps for rollover and contributions are:

    • Update to Contributions Implementation Working Group (ICWG) at the end of August 2015.
    • Further Scenario Development around cutover design.
    • Consultation outcomes on rollover to SuperStream Reference Group (SSRG) in September. Cutover outcomes in October 2015.
    • Rollover MIG v2.0 - final version for publishing in October 2015.
    • Contributions MIG v2.0 - consultation will re-commence in October 2015.
    • Contributions MIG finalised December 2015.

    8.3 Member information eXchange - MIX design

    Tracie Crowden (Manager, Member information eXchange Project, Data Standards and e-commerce, Superannuation) led the group through an overview to the MIX design process.

    In consultation with a working group formed from the SuperStream Reference Group (SSRG), the ATO has been working through the MIX design.

    Fund member reporting to government is one of the last SuperStream deliverables and is focused on improving and streamlining the reporting interactions for:

    • unclaimed superannuation money statements (USMS), including Section 20C notices.
    • member contribution statement (MCS)
    • Sec 299 TA/TC and please resolve notices.

    Cost effective improvements to the current Release Authority process will be reviewed.

    Key high level design points.

    Design principles, included:

    • building on SuperStream changes
    • removing obsolete reporting, using digital transactions that provide efficiencies
    • identifying opportunities to exchange member information
    • designing from a whole-of-change perspective considering other ATO initiatives (e.g. Single Touch Payroll)
    • addressing key messages from super industry - tell us once; digital and seamless interactions, right service at the right time and collaborative approach to design.

    Design - USMS and Sec 20C included:

    • a move to funds using the Rollover MIG (with minor amendments) to transfer and report unclaimed money to the ATO.
    • the ATO to use the Initiate Rollover Request to facilitate delivery of the Sec 20C Notice, with funds using the Rollover MIG to transfer these accounts to the ATO.

    Design - MCS

    The MCS to be replaced by two distinct interactions, being:

    • a web service to allow for attribute change to member accounts (real-time changes) - MIX Service
    • an annual message reporting contribution information and a 30 June balance.

    Design considerations included:

    • Changes required to Rollover MIG v2.0.
    • Exchange of information - where can we make improvements?
    • Reporting frequency - service level agreements.
    • Transition strategy - aligning changes with other initiatives

    Where is the ATO at with the MIX design?

    • The ATO is working through the feedback on the design tabled with the SSRG working group on 24 June 2015.
    • Reviewing the design to take back to the working group.
    • Feedback from members on the MIX design can be directed to SASGSecretariat@ato.gov.au.

    Members were encouraged to consider if the Release Authority can be incorporated into an ATO Initiate Rollover Request with funds using the Rollover MIG message to report and pay the amount to the ATO.

    9 Other Business

    9.1 Garnishee Notices

    The June 2015 Superannuation Product Management Communique update to industry on Refunds of Excess Con-concessional Contributions, makes mention of the ATO’s ability to use a Garnishee Notice process as a method of collect unpaid ATO debt from the individuals fund.

    Louie Markovski advised members that while legal capacity exits, the number of notices issued is expected to be minimal, explaining that the notice would only be issued after:

    • the Release Authority has issued to the fund, and
    • the effectiveness of collecting the debt through sending a Garnishee Notice has been assessed.

    9.2 Pending Pensions

    Andrea Cooper (Financial Synergy) asked how funds are managing accounts in pre-pension phase:

    • An account opened by the member for pension purposes pending the receipt of rollovers.
    • The ATO has ruled this phase of the account as being accumulation and earnings were taxable.

    General discussion reflected industry’s understanding and application of the ruling.

    The ATO undertook to provide feedback on this issue to the Risk Differentiation Framework team.

    10 Close

    Action items

    Action item reference

    Issue

    Allocated to

    26082015/02

    ATO to review Release Authority Matrix developed by Link Group.

    Louie Markovski

      Last modified: 08 Feb 2016QC 47924