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  • Rules that apply to all members

    There are rules to apply to all members when considering if they are a lost member.

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    Permanent exclusion

    The law

    A member is permanently excluded from being a lost member if:

    • the member is an inactive member who has indicated by a positive act that they wish to continue to be a member of the provider, or
    • the member has contacted the super provider at any time after they joined and indicated that they wished to continue being a member of the provider, or
    • the member is a member of a self-managed superannuation fund (SMSF).

    Best practice – ATO guidance

    ATO guidance for the permanent exclusion of members has been provided within the Inactive and Uncontactable sections of this document, as this test can be applied to both types of lost members. Refer to Uncontactable members and permanent exclusion and Inactive members and permanent exclusion for more information.

    The third test for permanent exclusion refers to membership with an SMSF – this means no SMSF account should ever be reported as lost.

    Where you become aware that a member has an SMSF account in addition to the interest they hold with you, you must still consider whether the member meets the lost criteria in relation to the superannuation interest held with you.

    Note: a permanent exclusion decision based on a positive act can be used for an inactive member account only.

    For funds only, you do not have the discretion to consider any other permanent exclusion tests. However, you are not obliged to accept any members that satisfy the definition of lost as being permanently excluded. Likewise, you may decide whether to continue treating a member, or class of members, as permanently excluded.

    Verified address

    The law

    Under both the SISR and the RSAR the member is taken to be a lost member at a particular time if they meet the criteria listed unless:

    • within the last two years, the super provider has verified that the member's address (electronic or non-electronic) is correct and has no reason to believe that the address is now incorrect

    Best practice – ATO guidance

    If you have verified within the last two years that the member’s address is correct and you have no reason to believe the address is now incorrect, then the member is not lost.

    Address verification may include:

    • you have never had an address for the member, the member contacts you and provides their current address and you record an address for the member for the first time
    • you contact the member and confirm the current address is correct and record the confirmation, or the member provides their new address and you update their records with the new details
    • the ATO provides you with an address for a member which confirms the address held in your records for that member and you have no reason to believe that the address in now incorrect
    • a third party authorised to act on the member's behalf (e.g. their financial adviser) confirms the current address held in your records for the member is correct and you record the confirmation, or provides the member's new address and you update your records with the new details.

    Actions that are good practice to verify addresses include:

    • calling a member’s mobile or work phone number to confirm their address details, and recording the confirmation
    • if the member receives employer contributions, contacting the employee via the employer to confirm the member's address
    • after having received returned mail, writing to the member at an alternative address which was located using an external source, such as the White Pages. An acknowledgement subsequently received (for example, by letter, telephone, email or similar) by you from the member could then be used to update your records
    • using system enhancements such as an ‘address-verification’ button which is automatically made available when a member enters or exits the website (for example, Y to confirm the address details, and N to update or add details).

    Example

    You have received two letters ‘returned unclaimed.’ You determine that the member is 'lost – uncontactable'. The ATO provides you with an address for that member which matches the address held on your records for that member.

    In this instance, the conflicting information makes it unlikely you could have verified the address until you have made contact with your member.

    End of example

    Lost and uncontactable

    The law

    A member is taken to be lost uncontactable under subregulation 1.03(1)(a) of the SISR or subregulation 1.06(1)(a) of the RSAR when:

    • you have never held an address for them (either electronic or non-electronic), or you have made attempts to send written communications to the member and you believe the member can no longer be contacted at any address known to you
    • the member has not contacted you within the last 12 months
    • the member has not accessed details about their superannuation interest, using your electronic facility, within the last 12 months
    • your have not received a contribution or rollover in respect of the member within the last 12 months.

    Best practice – ATO guidance

    The uncontactable tests outlined within legislation are intended to provide tangible steps for you to determine if a member knows about and is engaged with their account. However, this protocol document cannot cover every scenario or circumstance of every member.

    With reference to the Guiding principles for industry best practice provided at the start of this document, you should take into account your member's individual circumstances when applying this best practice guidance, within the bounds of legislation.

    Example – not lost

    You have received two  letters 'returned unclaimed'. But you have ongoing contact with the member through another means (for example through email, phone or your online service).

    We expect you to consider your member knows about their account, have demonstrated this through an indication of engagement, and should not be considered to be lost.

    End of example

    Holding a member's address

    This test is a question of fact – you may receive a member’s address on the initial membership application form, from an employer or other third party authorised to act on behalf of the member, via member correspondence (written or electronic) or telephone call, or in another way.

    Written communication

    A ‘communication’ includes any letter or publication addressed to the member which includes the member's complete address.

    Written communications need to be issued to the member's last known address and returned unclaimed – generally, this process occurs through the use of the postal system. For a written communication to be returned unclaimed, it is required it reaches its intended destination and then is subsequently returned to the original sender.

    While email is considered to be a form of written communication, it could only be considered as returned unclaimed where the original sender receives a return email advising that the recipient is either not known, no longer correct, or no longer at the address. A response that a mailbox is full, for example, does not equate to a 'returned unclaimed' written communication.

    Lack of response by a member to your communication requesting action, also does not equate to ‘returned unclaimed’ written communication.

    One written communication

    RSA and SIS regulations give youth option to act upon one written communication sent to the member's last known address that has been returned unclaimed. It is prudent for you to attempt to locate a member if they are considered lost. While you can act on one piece of returned written communication, we would expect reasonable efforts have been made to contact the member before reporting the member as lost.

    In these circumstances, the super provider should use the return of unclaimed mail as a trigger to undertake additional thorough searches to locate the member. Further guidance on what might be considered reasonable effort on your behalf is provided in Reasonable effort to contact the member.

    No contribution or rollover in 12 months

    For members to be lost uncontactable, you must not have received a contribution or rollover for that member within the last 12 months.

    Examples of activity for the member may include:

    • contributions received from an employer
    • contributions received from the individual themselves into the member's account or to another account held by the member with the same provider
    • eligible spouse contributions received
    • super guarantee contributions received by the fund from the ATO
    • payments made to the fund from the superannuation holding account (SHA) or unclaimed superannuation monies (USM)
    • government contribution (co-contribution and LISC) amounts received
    • a rollover received from another fund into the member's account.

    Examples that are not considered activity for the member:

    • investment earnings received by the super provider or distributions to the accounts due to investment returns and profitability
    • a transfer occurs under the successor fund transfer provisions and the trustee of the fund or the RSA provider remains the same.

    You should determine if you have received a contribution or rollover for the member within the last 12 months for the relevant reporting period end dates (this date can only be either 30 June or 31 December for any given year). For example, if a member meets the 12-month inactivity test in March (after the 31 December reporting period end date, but before the reporting due date), they should not be reported as lost uncontactable for this period.

    Also, you should not report the member as lost uncontactable if the account has met the 12-month inactivity test within the reporting period, but the member subsequently receives a contribution or rollover before you asses the status of your members for reporting purposes.

    Uncontactable members and permanent exclusion

    Refer to Permanent exclusion – The law for related legislation.

    For uncontactable members, there is only one permanent exclusion test you need to consider: The member requests to be permanently excluded from being lost.

    This permanent exclusion test also applies to inactive members.

    If a member is lost uncontactable or lost inactive, but has made contact with you and indicated they wish to remain a member indefinitely, they are permanently excluded from being lost.

    Acceptable forms of contact are not defined in legislation, and it is your responsibility to determine the manner of contact and proof of authorisation required from your member to meet this test.

    Examples of contact by the member may include:

    • the member calls you directly and informs you they wish to continue to be a member
    • you contact the member about something else, and in the course of this contact discusses permanent exclusion with you member – the member subsequently indicates their choice to remain a member
    • the member proactively chooses a permanent exclusion option on your website
    • the member writes a letter or email to you requesting to be permanently excluded from being lost
    • the member responds to your SMS, confirming they would like to be permanently excluded from being lost
    • the member ticks a box on a form, confirming they would like to be permanently excluded from being lost.

    We would expect you to revisit your permanent exclusion of members from being considered lost after a reasonable amount of time. When considering what a reasonable amount of time is you should take into account your member's individual circumstances and decide whether your action is appropriate.

    Lost uncontactable scenarios

    When considering these scenarios, remember you should exercise reasonable effort to contact your member if they become lost for any reason. The best outcome is for the member to be made aware of their account, and for you to receive an indication of engagement which will ensure the member is not lost.

    Scenario 1 – no contact or activity

    You receive returned unclaimed mail (email or postal) relating to a member for whom you have not received a contribution or rollover within the last 12 months of membership.

    You believe, on reasonable grounds, that the member can no longer be contacted at any address known to you (email or postal).The member has not made contact with you or engaged with you regarding their membership.

    The member has not accessed their account via any electronic facility within the last 12 months.

    The permanent exclusion criteria do not apply. This member is lost uncontactable.

    End of example

     

    Scenario 2 – address verified

    You receive returned unclaimed mail (email or postal) relating to a member for whom you have not received a contribution or rollover within the last 12 months of membership. You believe, on reasonable grounds, that the member can no longer be contacted at any address known to you (email or postal).The member has not made contact with you or engaged with you regarding their membership.

    The member has not accessed their account via any electronic facility within in the last 12 months.

    After receiving returned unclaimed mail, you have telephoned the member and verified their address (postal or electronic) (or a new address) in the past two years.

    The permanent exclusion criteria do not apply.

    This member is not lost.

    The member's address has been verified in the past two years.

    End of example

     

    Scenario 3 – one account updated

    The member has two accounts with you.

    The account balances are substantial and the member has been assigned a key client officer to support their membership.

    The permanent exclusion criteria do not apply.

    You have received returned unclaimed mail (email or postal) relating to the member for whom you have not received a contribution or rollover within the last 12 months of membership.

    The member has not made contact with you and they have not accessed their account via any electronic facility within the last 12 months.

    On your records, one account has been updated with the member's most recent address, while their second account contains the member's old address from which mail was returned unclaimed.

    The member is not lost.

    The legislation refers to account membership, and not each account.

    End of example

     

    Scenario 4 – email contact

    You have not received a contribution or rollover for the member within the last 12 months of membership.

    The permanent exclusion criteria do not apply.

    You have received returned unclaimed mail (postal) relating to the member.

    The member also has an email address registered with you, which is receiving correspondence with no issues.

    The member is not lost.

    You have a form of contact with your member, using an email address provided by the member. The fact you have issued paper mail in addition to the email correspondence which has not been received, does not negate the fact you have successful communication using a different means of correspondence.

    End of example

     

    Scenario 5 – SMS contact

    You have not received a contribution or rollover for the member within the last 12 months of their membership.

    You have attempted to send communications to the member’s last known address (email or postal) but have been unsuccessful.

    The permanent exclusion criteria do not apply.

    You launch an SMS campaign targeting seemingly unengaged members, asking them to confirm the address registered for their account.

    The member responds to their SMS to confirm the address is correct.

    The member is not lost.

    The member has verified their address.

    End of example

     

    Scenario 6 – no SMS contact

    You have not received a contribution or rollover for the member within the last 12 months of their membership.

    You have attempted to send communications to the member’s last known address (email or postal) but have been unsuccessful.

    The permanent exclusion criteria do not apply.

    The member has not engaged with you regarding their membership within the last 12 months.

    You launch an SMS campaign asking members to reply Y if their address is incorrect – an 'opt in' request (that is, 'if we don't hear from you, we will assume your address is current'). The member does not respond.

    The member is lost.

    The member has not verified their address, as the absence of a response cannot be used for address verification.

    End of example

     

    Scenario 7 – agent contact

    You have not received a contribution or rollover for the member within the last 12 months of their membership.

    You have attempted to send communications to the member’s last known address (email or postal) but have been unsuccessful.

    The permanent exclusion criteria do not apply.

    The member's financial agent calls you on behalf of the member and makes an enquiry regarding the investment strategy related to the member's interests in your provider.

    The member is not lost.

    Through an authorised third party, the member has showed they are aware of their account and has demonstrated an indication of engagement, proving they are not a 'lost' member.

    End of example

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      Last modified: 20 Aug 2019QC 27204