• Cutting red tape – lost and unclaimed superannuation

    In the 2015–16 federal Budget the government announced a package of measures to reduce red tape for superannuation funds and individuals by:

    • removing redundant reporting obligations
    • streamlining lost and unclaimed superannuation administrative arrangements.

    These changes will make it easier for individuals to be reunited with their lost and unclaimed super.

    Treasury have been working with the ATO and superannuation industry stakeholders to implement these changes, which are being rolled out progressively.

    Removal of the lost member statement

    Funds are currently required to lodge a separate biannual lost member statement (LMS) to the ATO. This change proposes to stop the separate reporting obligation as it overlaps with other reporting obligations to us.

    Proposed legislation for this change is contained in the Treasury Legislation Amendment (Repeal Day 2015) Bill 2016External Link.

    Updating the ‘uncontactable’ definition for lost member accounts

    This change recognises modern communications methods in determining if a member is uncontactable. It will better reflect members that can't be contacted.

    The regulation was registered on 26 February 2016 to start from 1 July 2016. The new definition will impact the reporting period 1 July 2016 to 31 December onwards.

    Enabling payment of unclaimed super to trans-Tasman KiwiSaver accounts

    Retirement savings can be moved between an Australian APRA regulated superannuation fund and a New Zealand (NZ) KiwiSaver account. However, individuals with unclaimed superannuation money (USM) accounts held by the ATO cannot have this money directly rolled into their KiwiSaver account.

    This change proposes to allow individuals to rollover their USM balances directly to KiwiSaver accounts.

    Legislation for this change has not yet been drafted.

    Direct payment of unclaimed super on terminal medical grounds

    A person suffering a terminal medical condition can access their super in a fund tax-free, prior to preservation age. However, they cannot currently access unclaimed superannuation money (USM) amounts greater than $200 held by the ATO.

    This measure proposes to allow payments of USM to be made directly to individuals who qualify on terminal medical condition grounds.

    Proposed legislation for this change is contained in the Treasury Legislation Amendment (Repeal Day 2015) Bill 2016External Link.

    Removal of ‘employer-sponsored’ element of the 'lost-inactive' definition

    This change proposed to remove the employer-sponsored element of the lost member definition, to better enable funds to correctly identify and report lost inactive accounts.

    Legislation for this change was contained in the Treasury Laws Amendment (2016 Measures No.1) Regulation 2016. However, in February 2016 the government decided to remove the change and it will not be proceeding at this time.

    Allow proactive eligible rollover fund consolidation

    This regulation was registered on 9 May 2016 and commenced on 10 May 2016.

    It allows the licensee of an eligible rollover fund (ERF) to reunite ERF balances with an active account in another registrable superannuation entity, without consent of the member.

    Small lost member account threshold increases

    Legislation was passed to incrementally increase the threshold of $2,000 to a threshold of $4,000 from 31 December 2015, and to a threshold of $6,000 from 31 December 2016.

      Last modified: 01 Dec 2016QC 45705