• Lost member reporting: September 2014 webinar transcript

    Please note the following changes that have occurred since this webinar was presented:

    The definition for 'uncontactable' was changed to recognise modern communications in determining if a member is uncontactable, effective from 1 July 2016 for reporting due 30 April 2017 onwards under Regulation 1.03A.

    As at 31 December 2016 the balance threshold for Unclaimed Super Monies to the ATO for small lost members increased from $4,000 to $6,000. The increase to the small lost member account threshold was announced in the 2013-14 Budget. Legislation for this change is provided in the Tax and Superannuation Laws Amendment (2015 Measures No.4) Bill 2015External Link which passed the Senate on 16 September 2015.

    Questions and answers

    The following information is responses to questions that were raised by webinar participants.

    Will the ATO look to improve the Bulk data exchange (BDE) data provided to funds? The current data reflects spelling errors and no validation of addresses.

    We are currently reviewing our Provision of Address (POA) process and the information used to source details of clients with lost super. This information includes the most recently lodged income tax return and where appropriate, the last known contact details for the client. We will also be looking at the information provided by clients on MyGov and determine whether this can be incorporated in future processes. Our current SQL – data scripting -- is also under review and is being updated to significantly reduce spelling and address validation errors from occurring. The next POA process will reflect these changes.

    A large portion of the data we receive from the ATO is inaccurate, for example, a date of death. How do we combat these identified inaccuracies from occurring?

    The information used to update our client register for deceased clients is provided to us by the Department of Justice. The information is sourced from each state’s Births Deaths and Marriages registries. We will also update our client register when the executor of an estate advises us of a date of death. Updates to the client register will only be made once this information has been confirmed In order to combat these inaccuracies from occurring, and due to the sensitivity of this information, feedback from funds has been sent to our data matching areas for review.

    In regard to the information extracted from the Office of Births, Deaths and Marriages; is there a way to identify the age of the data provided? This will enable the fund to confirm which data (ie fund information or ATO information) is older and action the more relevant information.


    The age of the data may be an area of consideration for future processes however, our client register is updated once the information from the Office of Births, Deaths and Marriages is received and verified. Therefore, the age of the data should not be a concern.

    How to treat deceased data provided as part of the POA program to eligible roll-over funds where no beneficiary details are held?

    An amount payable to a member of a fund is considered to be Unclaimed Superannuation Money (USM) if all the criteria below are met:

    • the member has died
    • you determine that, under the governing rules of the fund or by operation of law, a benefit (other than a pension or annuity) is immediately payable for the member
    • you have not received an amount for the member (or, for a defined benefit super scheme, no benefit has accrued for the member) within the last two years
    • after making reasonable efforts and after a reasonable period has passed, you are unable to ensure that the benefit is received by the person who is entitled to receive the benefit.

    Refer to the USM protocol document for descriptions of 'reasonable efforts and after a reasonable period'. The following extract is also taken from CRT Alert 049/2012 regarding deceased members.

    Deceased Members: funds will be sent data regarding member details where the ATO has been advised that they are deceased. If the date of death is available this will also be passed on to you. Under Section 32 of the Superannuation (Unclaimed Money And Lost Members) Act 1999 it is a legislative requirement that the fund must make reasonable efforts to ensure that the member’s beneficiary entitled to receive the benefit does receive the benefit. Where you are unable to identify or locate the beneficiary you are required to send the money to the ATO as unclaimed super. 

    What is the definition of employer-sponsored?

    Members with employer-sponsored accounts receive contributions from their employer. The employer may have created an account for them as part of a default fund arrangement with the super fund or the employee may have nominated a fund by notifying their employer of their choice of fund.

    Does the superfund account have to be set up by the employer?

    The employer provides the information required to the fund so that it can establish the account as an employer-sponsored account. The Superannuation standard choice form is for use by both employers and employees to ensure the correct account is nominated.

    How should we be reporting members for whom we have merged two accounts?

    Assuming they are both lost accounts, and have been reported as lost, then if one is closed due to the merger of accounts, and the other is still open (but still lost), then you will have to report the closed one with member status ‘T’ (Transferred), as it is transferred as lost into the other existing lost account and use the member money status value ‘00’ (ie still held by reporting provider).

    Find out more

    Lost members statement - electronic reporting specification member status indentifies the current lost status of the member.

    What is a 'reasonable period' (re USM)?

    The factors in determining ‘reasonable effort’ overall include: the information the fund holds for the member; the activity patterns of the account; whether there is an employer involved with this account; and the size of the account balance (and therefore the worth of relative effort required).

    What is considered to be a ‘reasonable period’ will depend upon the facts of each case – for example, if correspondence is sent overseas in an attempt to locate a person, a longer period of time should be allowed for receipt of a response when compared to correspondence sent within Australia.

    Also refer to the USM protocol document for a reasonable period explanation.

    If a member who has been reported as lost rolls over their entire benefit to another fund, should the original fund report this member as Transferred or as Found?

    This account can be reported as Transferred by the original fund, if the member has not re-established contact with the original fund (for example, if they used the myGov Electronic portability form (EPF) facility to transfer their account). If the member has contacted the fund and requests the transfer then it would be reported as found.

    What constitutes verifying an address for lost inactive? We send statements each year, plus other marketing letters – if they are not returned do we assume the address is still ok?

    In the absence of any returned unclaimed mail, providers can generally assume that the current address is correct However for lost-inactive, the address requires verification by some means - the marketing material may be being thrown out by someone else so that would not be suitable for verification. Funds may be able to source another form of contact with the member including contact via e-mail, phone, or the employer.

    If we pay a lost member to the ATO as USM in October 2014, does it come off the LMR in the same reporting period, or in April 2015? That is, do we report them in the same period if the transfer was done in the next period?

    Funds are encouraged to undertake their USM reporting first. This then allows funds to report the lost accounts which have been transferred to the ATO as USM, as ‘transferred’ in their lost reporting in the same period so that they are removed from the LMR. This reduces duplication at the ATO and over-reporting for that member. Where a lost member account becomes a small or insoluble lost member account for the first time, do not report them as lost before reporting as USM.

    Transferring and reporting in the same period - you said funds are encouraged to do USM first and LMR second. Our system works off date processed so this won't work at the moment. Do we have to change or is it just preferred?

    As per the previous answer, funds should report any lost accounts transferred as USM to the ATO by reporting as ‘transferred’ in their lost reporting in the same period so that they are removed from the LMR. This reduces duplication at the ATO and over- reporting for that member.

    Our system doesn't flag the lost members we have previously reported to the ATO, so we may not know if we have previously reported them. Is there a way for us to get information from the ATO of those lost members we have reported?

    Super providers should flag in their systems those members who have been reported to the ATO as lost. It is in the law (SUMLA Section 48) that super providers keep records and that they be retained for 5 years or until the completion of transactions.

    Members with nil or negative amounts should not be reported as lost members; how should funds report when they have previously reported a member as lost when they had a positive balance and subsequently their account balance drops to nil? ‘Error’?

    As the account is not 'Found' or been subject to 'Transfer', it should be reported as 'Error' to remove them from the LMR.

    We recognise that members’ account balances vary during the year, depending upon various charges and crediting amounts. So we recommend that super providers use their judgment as to whether the account predominantly has a negative or zero balance through the year and, as a result, should not be reported.

    Example

    A member has an account balance of $0. On 30 June 2011, the super provider makes a distribution and the member's account balance becomes $15. On 1 July 2011, the super provider then undertakes the general sweep of all accounts for taxes, and the account balance goes back to $0. The account is not expected to vary until 30 June 2012 unless a contribution or rollover is made to the account. Given that the account balance is predominantly $0 and, even though all other conditions that the member is lost are met, the member is not reported as lost.

    End of example

    Will the ATO update SuperMatch with the fund's USI?

    The USI will be included in the new version of SuperMatch 2 files expected in December 2015.

    Find out more

    Lost members register - protocol document

      Last modified: 02 Jun 2017QC 43293