Superannuation Administration Group key messages 8 December 2020

Welcome and opening remarks

Larissa Evans opened the meeting with the acknowledgment to country and welcomed those in attendance, noting the changes to the Superannuation Administration Group (SAG) membership.

Your Future, Your Super

Sonia Corsini and Michael Brooks provided an overview of the Your Future, Your Super measure.

There are two elements of the Your Future, Your Super measure that the ATO will deliver:

• the stapled super account
• the YourSuper portal.

The stapled super account is intended to limit the creation of unintended multiple superannuation accounts when employees change jobs. An employee will have one super fund they use across all changes to their employment.

The ATO is creating an online system where employers will be able to request details of a stapled fund account for their employees direct from the ATO when their employee has not made a super choice. If an individual has a stapled account, the employer must pay superannuation guarantee into that account. If the ATO does not hold the details for the stapled account the employer can opt for their default fund.

The rules around what determines a stapled fund is still being worked through, however it was noted a stapled account will always be an existing, open account.

The YourSuper comparison tool will allow an individual to look at and compare products on the basis of fund's investment return and fees.

The comparison tool will initially only contain MySuper products, with a view that the tool will be expanded over time to include other superannuation products.

Treasury have released the Your Future, Your Super package exposure draft and explanatory material for consultation, which concludes on 24 December 2020.

Given the timeframe to implement the measure by 1 July 2021, the ATO will commence engaging with industry as soon as possible, noting the legislation is still being finalised.

Indexation of the general transfer balance cap

Helen Morgan provided an update on the indexation of the general transfer balance cap.

The ATO continues to monitor the quarterly consumer price index (CPI) figures. If the CPI figures for the December 2020 quarter is 116.9 or higher, indexation of the general transfer balance cap will occur on 1 July 2021. The December quarter CPI figures are due to be published on 27 January 2021.

Noting the September quarter CPI figure was 116.2, the ATO is considering is it likely that the indexation of the general transfer balance cap will occur.

Industry members were reminded to be aware of this position and that once the general transfer balance cap is indexed, the only way an individual can see what their personal transfer balance cap is, is by viewing it via ATO Online.

The calculation will be based on the highest transfer balance cap for an individual between 1 July 2017 and indexation occurring.

Retrospective re-reporting or late reporting from funds will potentially change how individuals personal transfer balance cap is calculated.

The indexation will also change a number of other caps and limits in the system, including the defined benefit income cap which will increase to $106,250.

There are approximately 4% of individuals who have a transfer balance account and not entitled to indexation, resulting in their personal contribution cap remaining at $1.6 million.

Eighteen percent of individuals entitled to indexation however will receive an increase in personal transfer balance cap of $50,000, bringing the total to $100,000.

If indexation does occur, the ATO will look to hold a webinar in February 2021 to provide further detail.

Industry members were welcomed to provide feedback and the ATO will share with industry what the testing and deployment will look like once determined.

Early release of super update

Reece Parry provided an update on the COVID-19 Early Release of Super (ERS) arrangements for end of year processing and the conclusion of the initiative, including draft messaging for the ATO Online form help aside text for feedback.

The last fund files of determinations prior to Christmas will be sent on 24 December. This will include approvals up to and including 22 December.

Additional information data files will issue on 31 December, this will include approvals between the 23rd and 28th of December.

The ATO will recommence issuing files on 5 January, including all approvals up to 31 December 2020.

In the lead up to the shutdown period the ATO will release a range of communications and updated web material. The ATO Online application will include additional messaging for individuals relating to the shutdown of services and program closure.

A limited service for clients will be available on the non-public holiday business days during the shutdown period to accept phone applications and provide myGov linking codes.

The Fund CCRS team will be available during this time to continue to provide support for funds via the FundCCRS mailbox.

With regard to the program closure, applications for the program will close at 11.59pm AEDT on 31 December 2020. Applications cannot be accepted after this date or backdated.

A Superannuation client relationship team (CRT) alert will issue in January confirming the last day bulk files will be sent to funds through Bulk Data Exchange (BDE).

For any late remediation cases the ATO will engage with funds directly to arrange for the determination to be sent to the fund.

The ATO will confirm how late approvals will be issued to funds, whether via BDE or an alternative process (industry preference is to continue to use BDE) as well as provide an indication for when the remediation process is expected to conclude.

The ATO will also confirm if changes can be made to strengthen web content to reinforce that applications will close at 11.59pm AEDT.

The updates made to the online application form include:

• Additional wording in the application process box and application outcome help aside to include references to the program closure, processing timeframes and potential delays during the Christmas shutdown period.
• Changes to the landing page from 1 January to remove the ‘apply’ button and advise the program and application period has closed.
• From 14 January the application process box will be removed.
• From 26 January all ERS web content will be removed. Individuals will still be able to view prior applications through the broader Compassionate Release of Super (CRS) screen.

Rollovers v3 update

Belinda Black provided an update on SuperStream rollovers version 3 (including SMSFs rollovers and electronic release authorities).

The ATO has launched a webpage providing a single-entry point detailing all information and documentation relevant to SuperStream Rollovers v3.

The ATO is developing an onboarding and implementation factsheet to support industry through this phase. This will be a living document and updated regularly to include new information.

Following feedback at the co-design meeting held on 3 December, minor changes are being made to the Rollover v3 user guide, SMSF Verification Service business implementation guide and the SMSF TICK business implementation guide.

These documents together with the terms and conditions and updated onboarding summary are expected to be published by Friday 11 December.

The draft legislative instrument and explanatory statement have been updated to reflect the changes in the SuperStream schedule and have been released for public consultation. Feedback is due 4 January 2021.

The ATO has been working on the legislative provisions for SMSF rollover security and propose to include the ability for funds to request additional proof of identity and bank account information within the approved form if required.

The ATO is continuing to work through the peer to peer testing schedule. If members are interested in being involved contact Belinda Black.

The ATO noted the intention of moving the unclaimed superannuation money (USM) code and the release authority type out of the taxonomy and into validation rules to ensure there is no need to reversion the Message Implementation Guide (MIG). The changes in External Vendor Testing Environment will be staggered with USM occurring in December and release authority in January.

Reuniting more super (ERF and trustee discretion payments)

Belinda Black provided an update on the Reuniting More Super (ERF and trustee discretion payments) initiative.

The Bill is still before the Senate. Facilitating the closure of Eligible Rollover Funds (ERF), Trustee Voluntary Payments (TVP) and subsequent proactive consolidation by the ATO are part of this Bill.

The reporting and payment of TVP is a new category of Unclaimed Super Money. If the Bill passes in its current form the ability for trustees to report and pay voluntary payments may commence seven days after Royal Assent if it’s in the best interest of the member.

The ATO will consult with the SAG early in the new year to work through an interim reporting solution in the event law passes. The enduring solution forms part of Rollovers v3 MIG.

Digital ID Program

Ben Foster provided an overview of the Digital ID Program.

AUSkey was decommissioned in March 2020 with myGovID and Relationship Authorisation Manager (RAM) providing the replacement Digital Identity solution.

The level of adoption rates for the myGovID and RAM have exceeded expectations.

As part of the Digital ID program of work, it is anticipated the solution will be expanded to include more functionality and services over the next 12 months including the ability to add additional documentation and online tax file number applications.

The next significant milestone will be the introduction of facial verification.

This will give the user the option to upload a photo of their face that will be compared against an image held by government (for example a passport photo), providing a strengthened level of security to protect the integrity of personal information.

Users will be notified via the myGov app that the facial verification is available should they wish to use the option.

An alert has issued to industry advising current ‘basic level’ (excludes level 2 and 3 as these do not expire) authorisations for an entity to act on behalf of a user are due to expire. These authorisations need to be renewed for a further 12 months.

The ATO to confirm the process to renew the authorisations through RAM, including who is receiving the renewal notices and what action is required from the individual or administrators, depending on the hierarchy of who is authorised to undertake what action.

In terms of the impacts to the super industry, any user of the system that interact with government will be impacted. The ATO reaffirmed the face verification is not mandatory and will not change the software or log in process but will provide the choice to strengthen the integrity of the credential.

The SAG will be kept updated as this work progresses.

Fund operational performance report

Belinda Black provided an update on Fund Operational Performance Report.

The Operational Performance Report (OPR) is a tool that can provide transparency and insights on fund performance from an operational or transactional reporting perspective, noting that data quality is critical to ensure the accuracy and timeliness of reporting.

The ATO is resuming work on co-designing the new OPR with industry following work being paused due to COVID-19.

A sample prototype has been developed and discussed at the OPR co-design group meeting held on 8 December, focussing on testing the methodology and visualisation of the report to reach an agreed design.

The final report will be provided to the SAG for feedback once determined.

2019–20 end of year reporting summary

Larissa Evans noted that the 2019–20 end of year reporting summary was distributed to the group. When comparing the results to last year’s summary there are some positive improvements across most of the transactions that are measured.

Fund engagement updates

Rod Moreland presented an overview of the Super Enquiry Service.

The Super Enquiry Service for Australian Prudential Regulation Authority (APRA) funds will eventually replace the CRT mailbox as the preferred channel for super funds to contact the ATO. It will provide a more visible online solution and streamline resolution of enquiries.

The service will operate like the Online services for business portal, using RAM authentication and myGov credentials to access. The link to the service will be located on the APRA-regulated fund support ATO webpage.

Several features and benefits of the new service were discussed, including the real time notification of status updates and the secure transfer of data between funds and the ATO, replacing the Data Transfer Facility (DTF) function.

The service is currently undergoing internal testing to prepare for a private beta expected to commence in February 2021.

The operation of the service will be like the JIRA platform, providing the ability to filter and sort fields.

The ATO will confirm if the new service will have a time-out function and the ability to download function. It was noted that these features may require further exploration.

The SAG will be updated as this work progresses.

With the SAG’s assistance, we received 91 responses to the APRA Fund survey that issued on 5 November. This will provide invaluable insight on the fund experience when engaging with the ATO. We would like to particularly thank those members who took the time to provide comments.

Main results:

• Over 90% of respondents were satisfied with the value they derive from the consultation groups they attend (such as the SAG).
• ATO messaging at industry conferences or tax advisor briefings were important to 80% of respondents.
• Three-quarters of respondents thought we are working together effectively to administer the super system.
• ato.gov.au is the channel most often used (a quarter of respondents use it daily), followed by newsletters and CRT Alerts.
• In relation to COVID-19 early release of super
  • Questions and Answers and CRT Alerts were the effective communication channels.
  • Over three-quarters of those involved in design and implementation were satisfied with the level of engagement and consultation.
   

Searchability of ato.gov.au is an area for improvement.

Alastair Ramsay noted the normal processing schedule during the Christmas shutdown period will cease from 21 December to 1 January. The first run will commence from 4 January. A processing schedule will be published to ato.gov.au in the coming days.

Other business and close

Larissa advised members the Business Continuity event has been rescheduled to occur in February 2021.

Members were provided with two papers for noting; the SuperMatch v9 reconnection campaign update and the Super changes industry roadmap.

The ATO advised there are no system outages expected during the shutdown period.

Larissa and Sue thanked members for their ongoing support, engagement and flexibility throughout 2020 and wished everyone a safe and happy Christmas break.