Welcome and opening remarks
Larissa Evans opened the meeting with an acknowledgment to country, welcomed those in attendance and introduced the new members Chris Doull from Colonial First State and Mary Gale from Link SyncSoft and new industry co-chair Andrea Cooper from Iress.
Larissa acknowledged the work of Sue Pearce in her role as co-chair and thanked her for her contribution over the years.
Update on changes impacting funds
Kerry Lake discussed the following:
- Reducing downsizer eligibility age from 60 to 55 announcement in the recent budget. The Bill was introduced into parliament in August, but Royal Assent not yet received. If passed, the earliest possible start date is 1 January 2023.
- There are still several announced but un-enacted measures.
Member reporting
Larissa Evans commenced the discussion by advising that ATO Deputy Commissioner Emma Rosenzweig gave a speech at the recent AIST conference and re-iterated that quality member reporting is a major priority moving forward.
We are working with our tax colleagues in public groups and international (PGI) to improve member reporting. Nadia Alfonsi and Tracie Crowden from PGI discussed the combined assurance review (CAR) program. The Top 1,000 combined (income tax and GST) assurance program is part of the tax avoidance taskforce.
Most large funds sit in the Top 1,000 bracket. Funds are reviewed every 3 to 4 years, which is done under our justified trust program, which has just recommenced.
This program seeks to increase the ATO’s assurance that large public and multinational groups are reporting the right amount of income tax and GST or identify areas of tax risk for further action. This time we will be looking at around 80 funds. This number is less than previous as there has been approximately 20 funds wound up, mainly due to increased successor fund transfer (SFT) activity.
The scope will be expanded this time to include GST reviews of around 10 funds, and member reporting. Funds will receive a request for information (RFI) which will include a range of member reporting questions that focus on understanding what governance controls are in place to ensure accurate, timely and complete data is reported to the ATO. The focus on member reporting is to gauge the governance controls that are used to support correct, timely and complete data. Specifically, how funds manage emerging issues, risk mitigation, and change management.
Funds will also receive a unique Superannuation and Employer Obligations (SEO) operational insights report (OIR) in the form that has been previously designed with industry. This will provide insight into their 2021–22 transactional member reporting. The OIR is an engagement tool only and the RFI questions do not relate to any result or data in the OIR. Findings from these reviews and learnings about member reporting governance will be used to determine if any broader guidance is required to assist industry apply and improve their governance around member data.
This rollout will occur over the next 12 to18 months. Both PGI and SEO staff will work with funds during this process. Industry feedback is welcome. Moving forward there will be a shift in how the ATO responds to member reporting issues – ensuring that trustees are engaged in any remediation activity. The ATO also expects that funds be able to correct their own errors and issues, and actively engage with their members to communicate issues and take responsibility for the remediation process.
Assurance work update
Siobhann Unwin gave an update on campaign work to be undertaken over the next 3 months.
The fund services engagement and assurance team will focus on working with funds to rectify issues identified as part of the recent release authority program, specifically relating to excess non-concessional contributions (ENCC) default elections. The team will also engage with funds who have not met their annual balance reporting obligations.
Regarding our ENCC work, Siobhann noted that the ATO is working with funds identified as having reporting/system issues to ensure they are corrected. It is important that these issues are corrected in a timely manner to avoid potential unintended negative consequences for members.
Siobhann then discussed annual balances and reminded members that funds have a legislated requirement to report a 30 June annual member contribution balance amount transaction, on or before 31 October following the end of the financial year.
A question was raised whether a fix had been implemented for the status date issue. (Where a fund has reported a member account as closed, but it remains open in ATO systems). Siobhann advised the fix has not yet been implemented. A complex system update is required to achieve this and the group will be notified when a suitable date has been determined. In the interim, we will continue to undertake data fixes on impacted accounts as they are identified as part of our annual balance campaign work.
Your Future, Your Super
Katie Constance provided the following update.
Phase 2 stapling deliverable
The wholesale service that can be integrated by payroll software providers into business software, is scheduled for deployment in December 2022. We anticipate the digital service provider (DSP) test facility will be available in late October.
DSP’s have been provided with the ATO draft specifications. 18 DSP’s have expressed interest in the wholesale service. Employers will be able to receive the same stapled fund response rules and outcomes directly from within their business software. The specific design and integration into software will be determined by each DSP. The build of wholesale software solutions is voluntary; meaning the timing and availability for employers will be dependent on the uptake and build timeline of their relevant DSP.
The existing standard ATO Online services individual request platform will not be phased out – it will continue to be available to ensure employers can meet their obligations.
Post-meeting update – communications have begun issuing advising that the interim bulk request service will be decommissioned from mid-2023.
The government review of the Your Future, Your Super reforms
Treasury is the lead in this process and will conduct a roundtable discussion on the stapling service. The ATO will act in a support capacity. Attendees have been invited from many impacted stakeholder groups to gain a broad understanding on how the implementation is going and whether it is achieving the policy intent.
The review will cover all 4 elements of the package, and a main focus will be to identify any unintended consequences. Treasury has released a consultation paper, and submissions closed Friday 14 October.
Super choice form review
There have been some delays in the publication timeline due to competing ATO publishing priorities, we will communicate with members when the new form is available.
Some learnings and insights from the super choice form user testing process:
- This was not the point in time where users preferred to choose their fund. Most participants already knew what super fund they were going to use prior to filling out the form. Most would not conduct any research on choosing a different super fund when completing the form.
- Some stated they would consider consolidating down the track but at the time of starting a job they have a few forms to complete so they just want to get the forms in, make a good impression with their new employer, and get started.
- Users found the process of finding the relevant fund information disjointed and sometimes confusing. Users often first googled the info required, some navigated to fund websites, others used secure log in. Regardless of the method, users struggled to find all required information in the one spot. Some users found the compliance letter difficult to locate on their fund’s website.
- Terminology can be confusing to users. Both employees and employers highlighted there can be quite a bit of confusion around terms such as USI, SPIN, member number, member account number, fund name and product name. Some members mixed these terms up and as result input the incorrect number/information onto the super choice form.
Rollovers version 3 update
Katie Constance provided the following update.
While the formal project has been closed, we continue to work with internal and external stakeholders on implementation issues and processes. We have established a small working group that will focus on both fund-to-fund rollovers and release authorities, and consider:
- administrative processes
- operational issues
- information sharing
- process irritants
- areas for improvement.
Further information will be communicated to group members when at hand.
Fund engagement
Shane Moore provided the following update.
SFT protocol
Updates have been made to the SFT protocol following an ATO review, given experiences and learnings from recent SFTs. We encourage early engagement with the ATO and service providers to reduce complications and problems during and after an SFT. The draft is currently with our technical areas for review and clearance and will be shared with group members for comment.
Communication activities through Super News articles or CRT Alerts will be used to support the release of the updated protocol. Key changes and themes will be drawn out as part of this process.
SuperMatch
The ATO issued a questionnaire to funds using SuperMatch in March 2022, seeking insights into account opening processes and monitoring activities. The responses have provided valuable insights into monitoring activities undertaken within funds and how they respond to ATO issued SuperMatch alerts.
Following the SuperMatch working group meeting in early September the ATO agreed to:
- Draft a set of monitoring guidelines and controls that will allow all funds to identify issues quicker and apply controls faster.
- Continue analysis to better understand the scale, behaviour and motivators that lead to the creation of staging accounts in funds.
- Form an industry working group for broader discussion on staging accounts once the analysis was complete.
However work on these actions has been paused while we respond to other emerging issues across the sector.
The group discussed the Optus data breach and related SuperMatch alert issued on 28 September 2022. It advised that funds should take responsibility for assessing the risk to their member’s data and if concerned managing access to the service from their end. If the fund turns off the service, they must advise the ATO, however no contact is needed if the service continues as normal.
Funds are encouraged to remain vigilant and remember that they are the still the ‘source of truth’ for their member enquiries. Fund members should continue to check with the actual fund itself for their own personal comfort.
Super enquiry service
John Binu, ATO Client Account Services provided the following update.
There were approximately 334 enquiries during the last month, mainly self-managed superannuation fund member manual verifications that could not be processed through the SVS. Also Div. 293 ENCC that were related to release authorities, already touched on by Siobhann.
Other business and close
Larissa Evans advised we would be considering how to best schedule meetings for 2023. We acknowledge that not everyone’s preference can be accommodated but we will do our best when the forward meeting invites issue before the end of this year.
The question was raised about having face to face meetings. This will be considered, and the decision communicated to the group when determined.
Larissa thanked members for their attendance and contributions and closed the meeting at 11.57am ESDT.
Key topics discussed at the Superannuation Administration Group meeting 18 October 2022.