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  • Superannuation Administration Group key messages 11 February 2020

    Transfer Balance Cap regulation changes

    Helen Morgan provided an update on the transfer balance cap regulation changes. Key messages included:

    • The Treasury Laws Amendment (Miscellaneous Amendments) Regulations 2019 introduced a new retrospective debit in an individual’s transfer balance account that occurs where the value of a defined benefit income stream is reduced for reasons other than the recalculation of payments, a partial commutation or cessation of the original interest.
    • The changes apply to most commonly lifetime pensions for example a reversionary defined benefit pension paid to a surviving spouse reduces in value after a prescribed period of time when a child ceases to be dependant.
    • The value of the debit is the special value of the income stream just before the reduction in value occurs less the special value of the income stream just after the reduction occurs.
    • It is estimated the number of funds impacted by the changes is relatively small. The ATO encourages those funds that provide this type of income stream to engage with the ATO to understand the timeframe for when funds expect to be ready to report ongoing and retrospective debit events.
    • The ATO will commence consultation in the coming weeks on the updated Member Account Transaction Service guidance material to advise funds to report the new debit to the ATO as a member commutation event. While the credit and debit changes are not expected to affect the SMSF sector, for completeness the ATO will also update the Transfer Balance Account Report technical specification and the paper guidance. A SuperNews and SMSF article will be published advising of the changes.
    • Members were provided with examples on how the debit operates. These examples will also be used to update ATO web content, staff training and scripting messaging.
    • Members are welcome to use the examples however need to advise the ATO if they intend to do so. Any questions can be directed via email to SPRFundReporting@ato.gov.au.
    • The ATO clarified the changes only apply to lifetime pension or annuities or similar products as defined in not all capped defined benefit income stream products.
    • It was noted the regulations also:
      • ensure that an income stream was a capped defined benefit income stream before being commuted as part of a successor fund transfer arrangement will remain a capped defined benefit income stream after the successor fund transfer
      • made a number of adjustments in relation to innovative retirement phase income stream products:
        • a transfer balance cap credit will arise in the individual’s transfer balance account when an instalment payment is made which increases the value of the income stream after it is started to be in the retirement phase
        • changes the way the value of the debit that arises in the individual’s transfer balance account is calculated when the income stream stops being in retirement phase because the provider has failed to comply with a commutation authority
        • addresses a minor defect in the way the maximum commutation amount for an innovative retirement phase income stream is calculated so leap years are properly considered for innovative superannuation income stream products that reply on anniversary dates such as life annuities.

    Protecting Your Super

    Louie Markovski provided an update on the Protecting Your Super (PYS) Package. Key messages included:

    • The majority of account processing work has now been completed and the ATO are at the tail end of the project with a small number of Unclaimed Super Money (USM) lodgments and adjustments being finalised. The focus is now shifting to assessing the learnings ahead of the next USM period.
    • Following a significant system upgrade on 16 January, the ATO recommenced processing rollovers with the majority of amounts being relatively small.
    • The ATO continues operating with hyper-care arrangements, monitoring what continues to go through the system. As the next USM period approaches, the ATO will implement another hyper-care arrangement and apply the same level of support.
    • The ATO will continue with weekly runs until the peak processing period eases. The ATO will engage directly with funds that are likely to receive larger files of greater than 5,000 prior to receiving the rollover message. Automated aggregation runs will be held off until March.
    • Updates have been made to super processing schedules on ATO online which shows when a fund can expect to receive messages and payments.
    • If Legislation for the Eligible Rollover Fund goes through there will be additional requirements for the June–July period.
    • The ATO wrote to trustees on 29 January 2020 seeking estimates from funds as to their expected volume and schedule for the next USM reporting period so the ATO can prepare appropriate support.
    • One to one lodgments continue to be a focus for the ATO with a number of files found to be slowing up processing. A progress update on this will be provided to members at the next SAG meeting in April 2020.
    • It was noted that given the complexities with the adjustment process once the money has left the ATO and consolidated to another fund, funds are reminded to ensure lodgments are processed correctly to minimise the rework involved to rectify any errors. The ATO will update guidance material to provide clarification on the adjustment process.
    • The ATO is holding internal conversations with operational, product and IT areas about improvements that can be made ahead of the next USM period. SAG members were encouraged to provide feedback on the last USM period or suggestions for the next USM period to the PYSProject@ato.gov.au by 14 February 2020.

    Eligible Rollover Fund changes

    Louie Markovski provided an update on the Eligible Rollover Fund changes. Key messages included:

    • Members requested early engagement from the ATO and clarity on the administrative impacts and any additional ATO requirements once Legislation passes, noting the limited time to allow any system changes to be made if required.
    • Members discussed a number of anticipated challenges and complexities with the introduction of the new legislation.
    • The ATO to consider the best approach to work through any issues with industry given legislation has not yet passed and will confirm when consultation can commence.
    • It was noted there are also impacts for APRA and ASIC. The ATO will work collaboratively with these agencies to implement this policy.
    • Members were encouraged to send through any questions to the PYSProject@ato.gov.au.

    Secretariat note: the Eligible Rollover Fund measure passed the House of Representatives on 11 February 2020. Proposed changes to the bill were introduced in the Senate - Treasury Laws Amendment (Reuniting More Superannuation) Bill 2020External Link

    SMSF Rollovers V3 update

    Ian Morgan provided an update on the delivery of SMSF rollovers V3. Key messages included:

    • The IT area responsible for delivering EVTE are formalising the arrangements with a more specific timeframe expected by the end of February.
    • The SMSF Rollover co-design working group is expected to convene in early March to work through the lower level detail of the testing and on boarding processes as well as a focus on the security concerns for the SMSF rollovers and ensure any security, fraud or liability issues are identified and considered or addressed.
    • The SMSF change of details alerts commenced issuing on 3 February, currently there have been approximately 4,000 alerts issued.
    • The ATO confirmed the changes relating to the Transfer Balance Cap regulations shouldn’t have any implications on the SMSF Rollover V3 technical work.

    Action item

    11.02.2020-1

    Due date

    March 2020

    Responsibility

    ATO - Ian Morgan

    Action item details

    The ATO to confirm if there are any Message Structure Table validations outstanding

    Large APRA fund extract report

    Karen Stacey provided an update on the Large APRA fund extract report: Key messages included:

    • Following the update provided at the December SAG meeting the focus has now shifted from working through the design to developing a prototype and visualisation of the data.
    • The ATO will provide the working group with a prototype of their data early in the New Year for feedback.
    • It was noted that most of the metrics that have been discussed with industry have been captured in the prototype. The ability to extract this data on a more regular basis and produce the report across the large fund population has been a positive milestone.
    • Further work is required around the communication package to support the new product as well as articulating the opportunities for what the data can show given it is not being delivered or presented in the same way as the risk differentiation framework had done previously.

    SuperMatch Campaign update

    Shane Moore provided an update regarding the campaign on SuperMatch usage by super funds and their providers. Key messages included:

    • Members are reminded that the SuperMatch campaign has been underway since mid-December 2019.
    • The ATO wrote to all trustees advising of the release of version 8 and the requirement to engage with the ATO if not already certified under version 7.
    • It was noted that 40% of funds have now commenced or completed the engagement process. However looking across the group of funds using the services, the volume is sitting around 70% of those funds already certified under version 7.
    • SuperMatch continues to get a high volume of transactions. The ATO is undertaking a reconciliation of contact and usage data to identify the high volume users who are yet to engage with the ATO.
    • The campaign concludes on 17 February 2020. The ATO will commence removing access from trustees who haven’t engaged with the ATO after this date.
    • A webinar will be held on 13 February 2020 to provide further guidance and provide the opportunity for industry to ask questions.

    AUSkey Transition

    Shane Moore provided an update on the AUSkey transition. Key messages included:

    • The AUSkey credential expires midday Monday 30 March 2020. However Friday 27 March 2020 will be the last business day that the credential will be operational.
    • ABR system maintenance will occur during the weekend of 28 and 29 March 2020 impacting the ability to link a myGovID to an ABN.
    • This will impact on some funds waiting for the exception process which is still on track for delivery on 16 March 2020.
    • Funds can prepare in the lead up to 16 March by getting identity documentation prepared and certified.
    • For members who have ABNs that have non individual associates, there is a manual linking process now available.
    • It was noted that funds are unable to use RAM with the DASP Portal.

    Action item

    11.02.2020-2

    Due date

    February 2020

    Responsibility

    ATO - Shane Moore

    Action item details

    The ATO to provide the link to the guidance material for the bulk linking process for myGovId.

    Secretariat note: here is the link to the guidance material for the bulk linking process for myGovId External Linkfor members' information.

    Superannuation Data Standard Technical Group referral

    Shane Moore tabled a Member Matching issue raised through the Superannuation Data Standard Technical Group (SDSTG) for SAG member’s consideration. Key messages included:

    • The issue is around member information being passed through registration requests through SuperStream to member accounts held in a fund.
    • Given the maturity of SuperStream, the SDSTG referred the issue to the SAG for consideration given SAG representatives have a greater understanding of administrative and member matching processes to determine if there are further opportunities or benefits to improve matching and reduce downstream impacts and duplicate accounts.
    • It was noted that while most large funds have successful automatic matching processes, in some cases it can be significantly lower due to incomplete, inaccurate or out of date data being received from payroll systems.
    • Members noted that more employer education on the requirements would be of benefit to help improve the data quality.
    • It was also noted that Single Touch Payroll (STP) is being extended to the micro business sector in the coming months and this may be an opportunity where micro employers will turn their minds to data quality as part of the STP implementation.
    • The data quality is part of a broader factor and there is further work to be done to raise awareness with industry and employer groups about the impact of poor data quality. It is anticipated some of the insight into data quality will surface as part of the APEx work.
    • Members agreed that given the SuperStream technical solution has matured as much as it can at this time, this issue can be closed. However, it was agreed to keep the issue on the radar for any potential future contributions changes.

    Transition to new consultation arrangements

    Dawn Martin provided an overview of the ATO’s transition to new consultation arrangements. Key messages included:

    • The ATO is looking to decommission the Let’s Talk consultation platform.
    • The alternative consultation platform being proposed is GovTEAMS which is currently undergoing user testing with internal ATO staff and external industry representatives.
    • GovTEAMS is designed as a collaborative tool bringing together other Government agencies and external industry bodies in a secure online environment. Some of the features of GovTEAMS includes:
      • closed group consultation, accessed only by invitation to the group as a member
      • each consultation group will have a custom built landing page based on the specific requirements of the group, however there will be a consistent look and feel across all group pages
      • access to content relating to the specific initiative that is being consulted on for feedback.
    • The user testing has been valuable in understanding if the platform meets the needs of users as well as identifying some issues which are being worked through.
    • The ATO is taking a staggered approach to adding consultation groups to GovTEAMS from early March 2020.
    • Once a group has been established, the ATO will run familiarisation sessions with group members prior to formal consultation commencing.
    • Members were provided with some screen shots of what the GovTEAMS landing page will look like, showcasing features such as accessing documentation for review and quick links to other supporting documentation.
    • Members raised some concerns regarding the ability to view or access content that is open for consultation where the access is restricted to specific groups rather than in an open public domain. This specifically applies to the Superannuation and Employment Change Network group which is currently open to any interested industry representatives.
    • The ATO confirmed where a matter is open for broad consultation, this information will be available via ato.gov.au and a news article will be published in Super News with a link to the information on the website.
    • The ATO to give further consideration on how broader, more open consultation will work either within or out of scope of the GovTEAMS platform, as well as the security provisions to ensure emails being distributed to group members do not appear to be scam emails.
    • The ATO will keep SAG members informed of the progress.

    Fund Engagement updates

    Tracy Holloway and Rob Clarke provided an update on fund engagement initiatives. Key messages included:

    • The Successor Fund Transfer protocol chapter was updated prior to Christmas and the Unclaimed Super Money protocol chapter which was published early January.
    • The ATO is looking to commence consultation on the updated annual balance protocol chapter. It is anticipated this will be done using the new GovTEAMS platform by way of an expression of interest process for industry representatives who are interested in being involved. Further advice to be issued on this.
    • The ATO to consider distributing the updates being worked on to SAG members for feedback ahead of the broader consultation.
    • The ATO to clarify the intent of the Successor Fund Transfer Protocol with regard to when the clock restarts for Unclaimed Super Money over 65, lost insoluble and inactive low balance accounts and the legislative parameters.
    • The client experience survey will issue in March and will be open for two weeks. Some improvements and specific questions have been included based on industry feedback, including the inclusion of the Small Business Clearing House questions.
    • A review of ato.gov.au is underway to address some issues that have been identified around how it is structured and navigated. A Super News article issued late January 2020 asking for representative to participate in user testing of the new site. Members were encouraged to provide feedback.

    Action item

    11.02.2020-3

    Due date

    March 2020

    Responsibility

    ATO - Tracy Holloway

    Action item details

    The ATO to convene a meeting with SAG members and ATO technical staff to provide clarity on the technical changes made to the Successor Fund Transfer Protocol.

    Rob Clarke provided an update on the CRT team, noting:

    • There are ongoing delays with the Unclaimed Superannuation Money (USM) adjustment requests.
    • The Client Relationship Team (CRT) advised where the original requests have come into the ATO through the business portal in the USM adjustment template, a response to these requests will issue via the business portal also with an email sent to confirm this.
    • Members provided feedback that the email responses from the CRT are very generic and perhaps could be improved to provide further detail.
    • There have been a number of queries coming through the CRT around Superannuation account offsetting. Over the Christmas period a number of ATO system upgrades were deployed which has resulted in almost all client financial information is now managed in one accounting system.
    • The system now has the functionality to automatically offset excess credits from one account to outstanding liabilities in another account. The SuperStream USI accounts are not impacted; however pre-SuperStream accounts may be impacted.

    Priorities for 2020

    Sue Pearce lead a discussion on the priorities that were captured at the December 2019 SAG meeting and invited members to consider these items, their priority level as well as any additional items that might be relevant to form a forward work program. Key messages included:

    • Members discussed the items currently proposed for the forward work program, noting they were a good starting point.
    • It was noted that collaborating on the key topics for future discussion gives members the opportunity to raise issues as a group and advocate for the topics they see as important or that have had an impact on their administrative process.
    • From a practical level, members were asked to volunteer to table their nominated topic for discussion at a future meeting. The ATO will seek nominations from members to sponsor an agenda item prior to each meeting.
    • Members agreed to table Departing Australia Super Payment Online as an agenda item for the April SAG meeting.

    Action item

    11.02.2020-4

    Due date

    March 2020

    Responsibility

    ATO - Secretariat

    Action item details

    The ATO to issue a request to members seeking details on their top three issues/topics they would like to include as part of the SAG 2020 forward work program.

    Other business and close

    The Superannuation Changes Roadmap was provided to members for noting.

    No other business was noted. Larissa thanked members for their attendance and contributions.

    Action item

    11.02.2020-5

    Due date

    March 2020

    Responsibility

    ATO - Secretariat

    Action item details

    The ATO to consider a different format for meeting papers to enable extraction of papers that members would like to provide their colleagues for information

    Secretariat note: given the volume of documentation provided to members for SAG meetings, unfortunately there is not another format available that can combine all papers into one file. The alternative would be to issue separate word versions of each paper to members which, from an electronic usability perspective is not feasible. The ATO is looking at how GovTEAMs might be used to support the SAG including the document repository which may alleviate this issue. In the interim, members can contact FSEGovernance@ato.gov.au for individual copies of meeting papers.

    Attendees

    Attendees details listed below.

    Organisation

    Attendees

    ATO

    Larissa Evans (Chair), Superannuation and Employer Obligations

    ATO

    Ian Morgan, Superannuation and Employer Obligations

    ATO

    Louie Markovski, Superannuation and Employer Obligations

    ATO

    Tracy Holloway, Superannuation and Employer Obligations

    ATO

    Robert Clarke, Client Account Services

    ATO

    Karen Stacey, Superannuation and Employer Obligations

    ATO

    Tracie Crowden, Superannuation and Employer Obligations

    ATO

    Shane Moore, Superannuation and Employer Obligations

    ATO

    Helen Morgan, Superannuation and Employer Obligations

    AMP

    Grant McPherson

    ANZ Wealth

    David Delaney

    Association of Superannuation Funds of Australia

    Spiros Koziaris

    Bravura Solutions

    Ley Caldwell

    BT Financial Group

    Jimmy Sun

    Colonial First State

    Brett McLeod

    Commonwealth Superannuation Corporation

    Lex Dransfield

    CBA Comminsure

    Geoff Ferguson

    Grow Super

    Ross Cameron

    IOOF

    Heide Stewart

    Link Group

    Mary Gale

    Link Group

    Sue Pearce (Co-chair)

    NAB

    David Kerr

    Mercer

    Amanda Gunn

    SunSuper

    Ian Roberts

    QSuper

    Catherine Best

    SuperChoice

    Chris Denney

    TelstraSuper

    Nimalan Puvanasuntharam

    UniSuper

    George Strilakos

      Last modified: 01 Apr 2020QC 62018