• SASG minutes May 2014

    Meeting details

    Venue:

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

     

     

    Date:  

    Wednesday 28 May 2014

     

     

    Start:  

    10.00 am

    Finish:  

    2:10 pm

    Chair:  

    David Jordan

     

     

    Contact and Secretariat:  

    Deb Heffernan

    Contact phone:  

    13 28 69

    Attendees

    Alan Harvey

    AAS

    Amanda Gunn

    Mercer

    Andrea Cooper

    Financial Synergy

    Anne Dixon

    Precision Administrative Services

    Chris Greenwood

    UniSuper

    Christopher Smith

    Perpetual Investments

    Eion Burke

    Superpartners

    Garry Powell

    Super SA

    George Strilakos

    UniSuper

    Graeme Colley

    SPAA

    Heide Stewart

    James Barnwell

    IOOF

    Russell Investments

    Jun Tang

    Onepath

    Karen-Anne Herald

    NAB / MLC

    Kelly Kerr

    BT

    Kurt Suitor

    QSuper

    Maria Anislag

    Martin Mikulicin

    Zurich

    Bravura Solutions

    Mary Gale

    Syncsoft

    May Low

    CBA (Colonial First State)

    Rebecca Scott

    Perpetual Investments

    Robert Hodge

    Scott James

    AFSA

    Comsuper

    Simone Sluchniak

    GESB

    Sue Pearce

    Future Plus Financial Services

    Suresh Soppa

    CBA (Comminsure)

    Tania Wilson

    IOOF

    Colleen Gibson

    ATO – Superannuation

    David Jordan

    ATO – CAS, Superannuation

    Deb Heffernan

    ATO – CAS, Superannuation

    Ian Colhoun

    ATO - Super DSec

    Linda Cheesman

    ATO – CAS, Superannuation

    Michael Connolly

    ATO – Super DSec

    Paul Brunton

    ATO – Superannuation

    Phillip McDonald

    ATO – CAS, Superannuation

    Tania McFaul

    Tracie Crowden

    ATO – Superannuation

    ATO – Super DSec

    Apologies

    Ian Stirling

    Comsuper

    Jayne O’Ryan

    QSuper

    Karen Downes

    Superpartners

    Neil McMillian

    Pillar

    Simon Kinnas

    Pillar

    Tina Cifelli

    AMP

    John Shepherd

    ATO – Superannuation

    Mary Arrowsmith

    ATO – CAS, Superannuation

    Sally Druhan

    ATO – CAS, Superannuation

    Next Meeting

    Wednesday 27 August 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.

    Agenda Items

    1 Opening

    David Jordan (Senior Director, Superannuation and Accounting, Client Account Services) opened the meeting welcoming all in attendance including new representatives and guest attendees. Sally Druhan and Mary Arrowsmith sent their apologies.

    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.

    March 2014 SASG Minutes endorsed

    Final minutes of the meeting held Wednesday 12 March 2014, sent by SASG Secretariat email 23 May 2014 were accepted without change.

    2 Review of outstanding action items

    Action item

    04122013/16 – Investigate and advise members on required treatment on individual entitlement paid by the ATO to a non-compliant MySuper employer default fund.

     

    In Progress – 23/05/2014 – Issue is being progressed (including liaison with APRA). The ATO is liaising with APRA to finalise this action item. We have sought a determination from APRA regarding any requirement to reject a contribution paid by the ATO where MySuper arrangements are not in place.

    Action item  

    12032014/08 – ATO to review existing date of death (DoD) guidance for deceased lost member to be reported for unclaimed super money purposes where DoD is not known.

     

    In progress – 23/05/2014 – Draft response to be endorsed shortly.

    Action item

    12032014/09 – ATO to consider streamlining the redirection of rejected member entitlements to a new fund account destination through the inclusion of relevant PVA 'Transfer out data record' in the payment destination hierarchy.

    Completed 30/06/2014 – Response sent to SASG members on 30 June 2014.

    Action item

    12032014/10 – Provide advice in relation to the timeline to amend MCS protocol document in light of the expanded reporting obligations and other recent legislative changes.

    In progress – 13/05/2014 – Final next version is currently with publishing, it is anticipated it will be available in the next three weeks.

    Action item

    12032014/18 – ATO to review decision to advise that a RECC Release Authority should not be used to release funds from a Pension Account.

    In progress – 27/05/2014 – Further specific information provided for review by ATO.

    Action item

    12032014/19 – ATO to review fund claim process and procedure to determine process improvements that expedite the Fund Claim process.

    In progress – 23/05/2014 – ATO working through opportunity to streamline fund and ATO processing of fund claims with stakeholders.

     

     

    Action item

    28052014/01

    Completed – CRT alert 032/2014, issued 13 June 2014.

    ATO to consider providing funds with word version of latest published MCS Protocol document given limitations of web version for use as a training tool.

    Responsibility  

    Paul Brunton

    3 Budget 2014

    Paul Brunton, Superannuation gave a general overview of superannuation items which were announced in the budget:

    • Increase to the Super Guarantee (SG) rate
    • Bilateral social security agreement with India
    • Changes to Excess Contribution Tax (ECT)
    • Budget repair levy
    • First Home Saver Account (FHSA) is ceasing
    • Reduction in ATO staff.

    Action item

    28052014/02

    ATO to provide advice in relation to the timing of the update to tax table (including Schedule 33 - tax table for Superannuation lump sum payments) to incorporate temporary budget levy tool.

    Responsibility  

    SASG Secretariat

    4 Changes to ATO Systems update

    David Jordan, Senior Director, CAS, Superannuation updated the group on the changes to the ATO systems:

    4.1 USM to ICP

    Still experiencing problems with amendment processing. Account issues impacting about 127 funds/127,000 members have had to be remediated. Expecting that a system fix will be applied in early June and we will advise Funds via CRT alert.

    S20C notices all issued by paper. A small number of funds did not receive notices in sufficient time to meet the statutory due date and had been advised to defer payment to the next cycle (October). The cause of the problem has been identified (correspondence address hierarchy) and system fix is expected to be applied by the end of June, well in advance of preparations for the next s20C run in August.

    Action item

    28052014/03

    Completed – CRT Alert (amended) 028/2014, Issued 2 June 2014.

    ATO to:

    • clarify the timeframe to rollover ATO held USM to funds where individuals have provided a valid fund nomination form.
    • revise advice provided within CRT alert 028/2014.

    Responsibility  

    Linda Cheesman

     

    Action item

    28052014/04

    Completed – 28 July 2014.

    ATO to provide information on:

    • how Funds can lodge a GIC remission request; and
    • the criteria relevant to ATO’s consideration of GIC remission.

    Responsibility  

    David Jordan

     

    Action item

    28052014/05

    ATO to consider whether they can support/enable funds to lodge their backlogged PVA’s in bulk via an alternate method.

    Responsibility  

    David Jordan

    4.2 SG into ICP

    The recovery process has been run successfully. A small number were issued (one in April, three in May) and included one that resulted in PVA which also processed correctly.

    Outcome of Lodgment Report isn’t generating from ATO’s Integrated Core Processing System. Understand that this creates difficulty for funds in confirming the success or otherwise of their transactions. The suggestion is that funds reference their Statements of Account as the alternate source of confirmation of their transactions. The cause of the OOLR issue is still being investigated.

    5 Div 293 update

    Tania McFaul advised the regulations were made on 15 May 2014.

    All defined benefit funds and their administrators are required to:

    • Lodge all 2013 -14 MCS by the due date: 31 October 2014.
    • If you have calculated the amount of the ‘Defined benefit contributions’ using the new regulations and have prepared the MCS based on that on time to lodge by the due date then lodge the MCS with this field completed.
    • If not, then you must zero fill the ‘Defined benefit contributions’ (6.121 in the specification) and lodge the MCS by 31 October 2014 and then amend the MCS as soon as you have calculated this amount, but by no later than 31 January 2015.

    Refer to CRT Alert 027/2014 for instructions. However, if you are unable to comply with the 31 January 2015 date, you will need to advise SuperCRT@ato.gov.au as soon as possible to negotiate a lodgment deferment.

    Tania McFaul also discussed and confirmed the following in relation to Div 293 assessments:

    • We have turned on weekly batch for assessments based on accumulation contributions only.
    • Defined benefit assessments have been delayed due to the feedback received from individuals.
    • The law requires us to provide a release authority for each debt.
    • A payment slip will not be provided, EFT payments are encouraged.
    • An original signature is required on a release authority.
    • Members and funds are encouraged to download the relevant forms from the web.

    As a direct result of feedback the Div 293 correspondence was re-designed. Members were supplied with draft Div 293 documents.

    Action item

    28052014/06

    Completed – Feedback received by the ATO, referred to Tania McFaul, ATO on 12 June 2014

    SASG members to provide feedback in relation to:

    • Division 293 tax Release authority, Debt Account Discharge Liability
    • Division 293 tax release authority – Individual
    • Division 293 tax release authority statement – Superannuation Provider

    Responsibility  

    SASG members

    Tania McFaul also discussed the following in relation to the ‘End benefit notice’ process:

    • Will commence Tax Time 2014 – notice of debt account creation will start issuing.
    • July 2014 we will conduct a wrap up process – funds will receive a list of members who were created up to 1 July 2014.
    • Post July 2014 a monthly process will commence.
    • If a member crystallises before 1 July 2014 and they lodge their end benefit notice with the ATO, we will contact the fund via letter.
    • The ATO hopes to issue all the deferred debt assessments before 30 June 2014.

    The Div 293 tax has been fully deployed in the ATO hence the project team will cease to exist in August 2014. The work is being fully transitioned to Div 293 product team.

    Contact with the Div 293 project team should cease and general queries should be directed to SuperCRT@ato.gov.au whereas questions from the SASG group can be directed to SASGSecretariat@ato.gov.au

    6 Product update

    Linda Cheesman (Director, CAS, and Superannuation) advised:

    6.1 TFN notification process (299TA, 299TC and Please resolve letters)

    • The ATO is experiencing a number of system issues, however, they are in the process of being fixed and deployed.
    • Some of the files which have issued contain errors so the ATO advice is to ceasing actioning and delete the files.
    • The ATO will retrigger all the files again, it is anticipated they will issue relatively quickly.
    • A CRT alert will issue soon advising funds how to proceed.
    • Funds advised the critical date for receiving the replacement files is 30 June 2014.

    Action item

    28052014/07

    Completed – CRT Alert 029/2014 (Update) issued on 4 June 2014.

    ATO to issue CRT Alert to advise funds with guidance on required action to be taken with Sec 299TA / TC Notifications.

    Responsibility  

    Linda Cheesman

     

    Action item

    28052014/08

    ATO to provide advice in relation to fund obligation to update fund records in relation to a Sec 299TA or TC notice for member that has previously exited the fund.

    Responsibility  

    Linda Cheesman

    6.2 Surcharge assessment runs

    • It is no longer feasible to have four assessment runs per year, the ATO will reduce from four runs to two runs.
    • The first assessment run affected will be February 2015.
    • This decision will be communicated through a CRT Alert and the calendar of events in Super Update

    The new schedule is displayed below:

    February

    Will no longer be run, commencing February 2015

    May

    Remains unchanged

    August

    Will no longer be run, commencing August 2015

    November

    Remains unchanged

    7 Reuniting Super Update

    Linda Cheesman (Director, CAS Superannuation) advised:

    7.1 Provision of Address (POA)

    • Our POA process helps us to reduce the size of our lost members register by providing funds with updated addresses for their lost members.
    • Our next process will commence week beginning 16 June 2014, in addition to our normal process we will also include the client's email address and phone numbers. Update: our next process has been re-scheduled to 7 July 2014 as per CRT alert 031/2014.
    • We will provide separate data which has been run across the whole of the Lost Member Register for over 65s and deceased clients.
    • The date of death data is provided by the Tasmanian Department of Justice.
    • The January 2014 process significantly reduced the number of lost members, over 65s and deceased clients.
    • Funds are encouraged to continue actioning the data and if they are not a participant in the POA process they should sign up.
    • A CRT alert will issue closer to the 16 June 2014 as a reminder that the process is occurring.

    7.2 Proactive payments

    • We had a pool of 44,000 clients, this year it was expanded to include >$200 payments for specific clients (eg over 65s up to $10,000).
    • Year-to-date payments – $42 million for 110,000 members.
    • The ATO still send a large number of cheques, we are actively obtaining EFT details.
    • The ATO will be contacting Funds in the next couple of weeks to encourage electronic transfer of monies.
    • Fund Validation Service (FVS) – We are currently contacting funds who still receive payments via cheque and encourage them to deal with the ATO electronically. Part of this contact will be to establish whether we can use the EFT information contained in FVS or whether other EFT details were appropriate.

    7.3 TFN matching

    Year-to-date, the ATO has manually matched:

    • LMR forms 1.4M
    • MCS Forms 718K.

    This has resulted in greater visibility of members' accounts on-line and an increased pool of candidates for the TFN notification process.

    7.4 Email and SMS campaigns

    The ATO is undertaking another SMS and email campaign mid June 2014 covering a population of 60,000 members that have:

    • 2012-13 income tax return lodged via e-tax
    • email address and / or mobile number provided by the client in their income tax return
    • lost super (balance > $2000)
    • no ATO held amounts
    • has an active fund to transfer in to (excluding Defined benefit accounts).

    We will exclude:

    • population targeted in previous pilot
    • temporary residents
    • deceased clients
    • 45 Funds have been granted lodgment deferrals, total members affected 41,677 (April 2014 report).

    The ATO will place some information on ato.gov.au to assure members the campaign is legitimate campaign. The ATO is moving towards issuing:

    • 20,000 emails;
    • 20,000 SMS; and
    • 20,000 SMS & emails.

    The last pilot which was run resulted in 10% activity from the contacted clients so we do not anticipate there will be a huge impact on the fund call centre.

    We are anticipating a marginal increase in the success rate of the campaign as individuals will need to set up a myGov account this year to lodge their income tax return electronically hence they may be more inclined to click on the on-line services link in the email.

    8 Compliance Update

    Paul Brunton (Director, Superannuation) provided members with an update of recent Compliance activities.

    Key issues discussed included:

    1. 2014-15 planning process is underway for Compliance

    2. unclear of impact of reduction in ATO staff

    3. the ATO is continuing with their help and education process, we will not be reverting back to the accuracy and completeness audit program in 2014-15

    4. we will focus on:

    • Unclaimed monies and lost monies around the April and October 2014 due dates.
    • 2013-14 MCS to assess whether any further follow up is required
    • End benefit notification for defined benefits for Division 293 tax purposes – potential follow up process.
    • The large fund risk differentiation process will continue based on October 2014 reporting. This may result in high risk funds or key clients being notified of their risk category with a subsequent teleconference or visits from February / March 2015. There is also a possibility an Information System Risk assessment will be conducted on Administrators who have common issues.

    5. Super Guarantee – Funds were encouraged to email the ATO if they become aware of an employer not complying with Super Guarantee obligations. The ATO has an email channel which funds can use to notify us. There is also a channel for members who approach funds regarding their super guarantee concerns. Industry advised it is extremely difficult for a trustee to ‘dob in’ an employer as they are also a client.

    A Fact sheet for third parties reporting unpaid super was provided.

    9 SuperStream – update on the ATO introduction of data standards 2014 -2017

    Ian Colhoun, Director SuperStream Data standards and e-Commerce, presented a PowerPoint presentation covering SuperStream deliveries in December 2014, through to December 2016.

    The focus of the presentation was to provide an update on the design and delivery of the next two major releases (December 2014 and December 2015) and to present some very early planning in terms of December 2016. As part of the update, Ian outlined some design positions anticipated by the ATO and sought feedback from the industry representatives.

    The main topics covered included the introduction of the Electronic Portability Form (EPF) in the standard, how ATO sourced contributions and USM rollovers would manage the Unique Superannuation Identifier (USI), and how the design might cater for amendments, recoveries and make better use of the messaging environment.

    Design considerations were discussed however the ATO would appreciate any additional feedback from the representatives to gauge the impacts of the design on funds and for this reason a separate summary of questions will issue out of session. Ian finished the presentation with a brief outline of the plan to engage industry in the co-design of the Fund Member Report, scheduled for release in December 2016.

    A copy of the presentation was distributed to members for information.

    Action item

    28052014/09

    Completed – Sent to SASG members on 18 June 2014.

    USM statement not incorporating USI

    Responsibility  

    Ian Colhoun/Paul Brunton

    10 Data standards and e-commerce update - Contributions

    Colleen Gibson, (Director, Data Standards and e-Commerce) updated members on the progress with the implementation of the Contributions Data Standard.

    The Legal Instrument was registered on 27 May 2014 and has been published on the web, in summary the changes are:

    • The arrangements providing for an early and voluntary induction process from 1 July 2014 for funds, employers and solution providers have been confirmed.
    • APRA funds have been given additional flexibility up to 1 July 2015 to comply with the SuperStream standard. This flexibility means that APRA funds can either:
      • begin to receive compliant contributions on or before 3 November 2014, or
      • select an alternative start date to comply from by notifying the ATO of this date and providing an implementation plan to the ATO by no later than 30 September 2014. This alternative start date can be any date up to 1 July 2015.
    • The sending and receiving of error and outcome response messages does not begin until 2 February 2015.
    • The overall contribution transition-in period has been extended by 12 months to 30 June 2017, allowing funds and employers to continue using existing electronic channels, provided they meet certain requirements, for all of this period if they choose.

    To extend flexibility for employers and SMSFs in complying with SuperStream, the changes are supported by the Commissioner’s compliance approach as set out in the ATO’s SuperStream compliance statement. This provides flexibility up until 1 July 2015 for large and medium employers and SMSFs to complete their implementation.

    Small employers have flexibility for a further year, up until 1 July 2016, to complete their implementation of SuperStream.

    Induction groups

    The first induction group will consist of approximately 20 employers and will commence around 5 August 2014.

    We are:

    • aiming to increase the number of employers to approximately 40
    • all the major gateways and clearing houses will be inducted in this process
    • messages will not be sent to funds that are not ready to receive.

    Communication activities

    • A communication from the ATO to industry representatives outlining the changes in the Legal Instrument issued on 27 May 2014.
    • A Press release by the Minister was issued on 26 May 2014.
    • Letter issued on 27 May 2014 by APRA advising a deferral of Superannuation Reporting Standards (SRS) 711.0 Commencement is now 1 July 2015.
    • A joint APRA/ATO letter will issue to Registrable Superannuation Entities (RSEs) in the coming week providing information on key dates.

    11 Feedback on Webinar

    Paul Brunton (Director, Superannuation) provided members with the feedback on the pilot webinar 'Member contributions statement reporting issues'.

    • Administrators, funds and ATO staff attended – 113 people from Industry.
    • The ATO received good feedback, it was considered a great initiative.
    • We will address the questions raised by email to the participants.
    • We expect will issue a transcript of the webinar.
    • Any suggestions for future topics or feedback should be direct to SuperCRT@ato.gov.au.

    12 Updates for other forums

    Superannuation Industry Relationship Network (SIRN)

    Paul Brunton (Director, Superannuation) provided members with an update from the last SIRN meeting. Their focus is to reduce red tape. The ATO has been working on the 10% work test for personal deductible contributions and review of age and work tests in superannuation, however, it is likely we will need to return to the forum and ask more questions before we can progress.

    The ‘Notice of intent to deduct super contributions’ virtual form was published on the SILU website on 27 May 2014.

    The old Personal contributions form should continue to be used until a new form is published.

    Action item

    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.

    Responsibility  

    Paul Brunton

    13 Other Business

    1. Paper business activity statements (BAS) – The ATO is moving away from issuing paper BASs. The ATO will cease issuing paper activity statements as at 1 July 2014, however, there are several exceptions (ie no active ABN or clients who receive instalment notices).

    2. Release authorities – Anne Dixon, Precision Administration expressed concern regarding the ATO practice of separating cheques from the release authorities resulting in emails asking funds to identify who the money belongs to. Sue Pearce, Future Plus Financial wanted it noted this practice is very manual and antiquated. Linda Cheesman will investigate this further.

    3. USM– GIC on RBS and PVA documentation – Eoin Burke, Super Partners expressed concerned over the ATO’s inability to issue the RBSs via paper and their inability to reconcile accounts due to $0 balances. Consideration need to be given to the following due to the volumes:

    • the likelihood of GIC remission for the period Jan 2014 through to April 2014
    • the possibility of reduced PVA paper work requirements i.e. a bulk PVA request.

    4. Fund Validation Service – Simone Sluchniak, GESB raised the following issues which are causing confusion:

    • it appears as if the organisation name is equal to entity name
    • incoming roll-overs are being sent to one USI, however, the intention is it should be directed to the other
    • FVS is treating rollovers and contributions quite differently.

    5. BDE and inbound channels – Paul Brunton advised June/July 2015 is a very busy time gathering data for income tax services, so funds should work around this period in relation to bulk Super Tick, data cleanse and matching activities.

    6. Statement of Account (SOA) – Sue Pearce, Future Plus Financial advised they recently received a SOA via email due to the number of transactions exceeding the ATO limitations on 2600 transactions. Sue questioned the security of sending the SOA via email. The ATO is currently considering making the information available via the Provision of Address mailbox.

    Action item

    28052014/13

    ATO to provide advice in relation to Fund Validation Service (Simone Sluchniak - GESB):

    1. Legal name issues
    2. Fund can’t accept contributions from non-related employers, but can accept rollovers in respect to current members - MCS implications

    Responsibility  

    Ian Colhoun

     

    Action item

    28052014/14

    Completed – CRT Alert 037/2014 Issued, 20 June 2014.

    ATO to issue CRT Alert notifying industry of request to limit the use of SuperTICK bulk service for data cleanse activities during June/July 2015

    Responsibility  

    Paul Brunton

    14 Close

    David Jordan thanked all attendees for their contribution to a very successful meeting. The next meeting is scheduled for Wednesday 27 August 2014.

      Last modified: 09 Sep 2014QC 42328