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  • Annual amounts and balances

    The annual amounts and balances section of this protocol relates to fields which are not reported as event based transactions and are instead generally reported once per year before 31 October.

    On this page:

    Defined benefit schemes and constitutionally protected funds (CPFs)

    Annual amounts for defined benefits schemes and CPFs are referred to as:

    • notional taxed contributions (NTCs)
    • defined benefit contributions (DBCs).

    These contribution types generally reflect what an employer would have needed to contribute to a member's account in a year for their super to grow to equal their expected final benefit.

    Note: NTCs and DBCs are calculated differently – take care not to confuse the two. You should determine the amount of these contribution types for each member with the advice of an actuary and in accordance with the Income Tax Assessment Regulations 1997 (ITAR 1997).

    Reporting notional taxed and defined benefit contributions

    NTCs and DBCs are reported at the following times:

    • if the member's interest with the fund ceases before 30 June, the amount is reported as calculated immediately before the member's interest ceases
    • in all other cases, the amounts are reported annually as at 30 June.

    Reporting fields for DBCs and NTCs will not accept negative values. When the calculation of NTC or DBC results in a negative value, you'll need to ensure your systems report a zero amount to us.

    Your obligations when reporting contributions for defined benefit schemes, CPFs and public sector schemes are complex. Ensure your procedures and systems are based on sound professional advice. You may need to ask us to provide written advice on some specific reporting issues you have with member contributions.

    Not all contributions made by an employer to a defined benefit scheme are reported as employer contributions. Instead they are included in the calculations of NTCs and/or DBCs. If you are reporting for a defined benefit scheme, make sure you understand this issue and report contributions at the correct field.

    Compulsory contributions when made pre-tax towards funding a defined benefit (for example, where they are included in the actuarial calculation of NTCs and DBCs) are not reported at the employer salary sacrifice field. If these amounts are reported here in error, members may be assessed incorrectly for excess concessional contributions and Division 293 tax. Some members entitled to a deferred debt account will instead receive a due and payable debt.

    Transitional arrangements (grandfathering) for defined benefit interests which are not in a CPF

    If a member held a defined benefit interest (that is not in a CPF) on 5 September 2006 or 12 May 2009, transitional provisions (commonly known as 'grandfathering') apply when certain other conditions are satisfied.

    Under these transitional arrangements the member’s NTCs will be equal to the cap if the NTC amount determined with the advice of an actuary exceeds the concessional contributions cap for the financial year.

    With the introduction of the Member Account Attribute Service (MAAS) and Member Account Transaction Service (MATS), these amounts will no longer be capped in your reports to us. Instead you'll complete the grandfathering indicator in the MAAS and report the fully calculated amount of NTCs in the MATS. Our systems will reference the data from the MAAS and MATS to obtain the correct amount of contributions for the calculations.

    Reporting NTCs in the final 2017–18 member contributions statement (MCS)

    In the 2017–18 financial year you may continue to cap the NTC amount equal to $25,000 if the member is eligible for grandfathering and the true NTC value exceeds the concessional cap. If the true value of the NTC is capped on the MCS, a transfer balance account report (TBAR) must be submitted with an NTC event type with the true value of the NTC amount.

    This additional TBAR reporting is not required if the true NTC amount is reported on the MCS.

    Example 1 – Partially unfunded defined benefit interest

    Bob has a partially unfunded defined benefit interest which is eligible for grandfathering. Bob's NTC amount is $27,000 and his DBC amount is $32,000. The provider caps the NTC amount reported on the MCS at $25,000 as per the current MCS instructions. The provider lodges a TBAR with an NTC event type with the value of $27,000.

    End of example


    Example 2 – Fully funded defined benefit interest

    Jane has a fully funded defined benefit interest which is eligible for grandfathering. Jane's NTC amount is $42,000 and her DBC amount is $42,000. The provider caps the NTC amount reported on the MCS at $25,000 and reports Jane's DBC as $42,000. The provider does not lodge a TBAR with an NTC event type as the interest is fully funded and the NTC amount equals the DBC amount.

    End of example

    Public sector defined benefit super schemes

    If you are reporting for a public sector super scheme that was established before 5 September 2006 and you have chosen to exclude last-minute employer contributions from your assessable income under section 295-180 of the ITAA 1997, you must report these amounts only at the field 'Other non-concessional contributions'.

    Reporting account balances

    You're required to report the closing balance of a member's account as at 30 June as it is known to you at the time of reporting.

    In the interests of the member experience, you may also choose to report the opening balance of an account, particularly in instances where an account has been closed and a new account opened early in a financial year. This is because the new account will not show with a balance in the list of current accounts on ATO Online until that balance is reported, which in some cases may be up to 16 months later. If you choose to do this, you will not be reporting with an effective date of 30 June and will still need to report a 30 June balance on or before 31 October following the end of that financial year to meet your reporting obligations.

    Example – accumulation accounts closed on 30 July 2019 and new accounts opened on 30 July 2019.

    Provider A is transferring its members to provider B as part of a successor fund transfer. Provider A closes all of its member accounts as at 30 July 2019. Provider B opens the new accounts on 30 July 2019. The accounts for provider A will no longer be displayed on the ATO Online Fund details tab and the accounts opened in provider B will display in the Fund details tab but with no balances. For an improved member experience, provider B chooses to report opening balances for these new accounts as at 30 July 2019 so that its members are able to see the balances prior to the legislated annual balance reporting date for these accounts of 31 October 2020.

    End of example

    There's no current legislative requirement to report the opening balance of an account except where it is required under transfer balance cap law as a retirement phase event.

    There is no single method for determining the balance or value of an account for the 'account balance' field. The law does not prescribe a method (for example, in relation to accumulation account consolidation) and there are various methods used across the industry.

    The following are examples demonstrating broad principles and events that may influence the 30 June balance you report:

    • investment manager announcements to the value of all member accounts as a result of investment distributions
    • other routine adjustments to the value of all member accounts as a result of investment distributions.

    The effect of adjustments to the balance made after the annual reporting is prepared for lodgment don't need to be reported, unless they arise from errors rather than from routine adjustments in the value of investments.

    You'll have reported correctly at the account balance field if you use any reasonable method for determining the account balance that is appropriate in your circumstances. A reasonable method is one that provides your best estimate of the value of the member's interest on 30 June based on the information available to you at the time you report.

    Where possible, avoid significant differences between the balance you report to us, (which your member will rely upon when viewing the information we display online) and the balance reported in the member statement you provide to your member under the corporations law.

    For retirement phase capped defined benefit income streams, the transfer balance account balance will be utilised for total super balance purposes. For all other accounts, the account balance reported as at 30 June will be used for total super balance purposes unless an accumulation phase value (APV) or retirement phase value (RPV) is supplied.

    Negative account balances

    You cannot report negative balances. If your accounting systems record a negative balance, you need to ensure that your reporting systems report a zero balance to us.

    Zero account balances

    To determine whether you have an obligation to give a report for a particular member, don't consider their account balance, consider whether that member held an interest in the fund at any time during the financial year.

    Super providers are required to report each and every separate interest held in the super plan for a member at any time during the financial year.

    The circumstances where a zero balance is reported include:

    • an insurance-only policy where the only contributions are applied to pay premiums to an insurer rather than being accumulated
    • an entitlement to a lifetime pension based only on years of service and final salary.

    For defined benefit and other non-account based interests the account balance reported at this field should only be zero when there has not been an amount reported in periodic statements issued to the member.

    Example 1 – Member interest in the fund

    An individual becomes a member of a super fund, and under the terms of the fund's trust deed, they become entitled to life and disability cover. The member has an interest in the fund even if their sponsor employer has not made contributions for them. The fund must report this member's attributes despite the account's zero balance and report a zero balance as at 30 June if applicable.

    End of example


    Example 2 – Insurance only interest

    An insurance only interest is attached to a member's super account which receives quarterly contributions. The contributions are immediately consumed by equivalent premiums paid to an insurer. In this case, the account will have a zero balance at 30 June but must still be reported to us.

    End of example


    Example 3 – No interest

    If no amount, benefit or entitlement exists, an account with a zero balance may simply be set up to receive future contributions that are not made before the end of the reporting period. No transaction reporting is required by law for these types of zero balance accounts.

    End of example

    Accumulation phase value

    The ITAA 1997 states that the value of an accumulation phase interest is the amount of the benefit that would become payable 'if the individual voluntarily caused the interest to cease at that time'. This is the gross amount payable at 30 June net of exit and administration fees.

    An exemption has been provided for the 30 June 2017 and 30 June 2018 accumulation phase value (APV) calculation. You are not required to supply the APV if the difference between the APV and account balance is limited to the sum of exit and administration fees if a member was to cease the interest.

    While this definition works for most providers, there are difficulties in accurately valuing accumulation phase interests in defined benefit public sector schemes.

    How to determine accumulation phase values – possible approach for defined benefit public sector super schemes

    In some schemes, members cannot voluntarily cause their interest to cease. These schemes have no basis for determining an APV.

    In other schemes, valuing an interest on the assumption that a member has left the scheme generates a figure significantly lower than what the member will actually receive if they remain in the scheme.

    Consideration is being given to an alternative approach to valuing accumulation phase interests for public sector defined benefit schemes. Further guidance will be provided for these once confirmed.

    Retirement phase value

    Retirement phase value (RPV) reporting is only required for super income streams covered by subsection 307-230(4) of the ITAA 1997.

    The RPV you need to report is the 'current value' of the super interest that supports the income stream at the end of 30 June of the relevant financial year. Current value is the amount that would become payable if the member was to voluntarily cease the interest. This is the gross amount payable at 30 June net of exit and administration fees.

    An exemption has been provided for the 30 June 2018 RPV calculation. You are not required to supply the RPV if the difference between the RPV and MCS account balance is limited to the sum of exit and administration fees if a member was to cease the interest at 30 June. RPV reporting is not required for capped defined benefit income streams. The value of these interests at 30 June is obtained from the balance of the transfer balance account and not the MCS account balance or RPV.

    Reporting amendments

    See Amending transactions, balances and events in the Amendments section of the protocol.

    Last modified: 07 Jun 2018QC 55927