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  • Lost inactive decision process flow

    This diagram provides a step-by-step process for funds to follow, in order to comply with legislative criteria for lost inactive member accounts.

    Lost Inactive Decision Flow Diagram

    Inactive 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 their fund to receive an indication of engagement which will ensure the member's account is not lost.

    Refer to Reasonable effort to contact the member for further guidance.

    Scenario 1

    The member has been a member for over two years.

    You have not received contributions for the past five years.

    The member is not a standard employer-sponsored member.

    This member is not lost inactive.

    The member is not an employer-sponsored member.

    End of example

     

    Scenario 2

    The member has been a member for over two years.

    You have not received contributions for the past five years.

    The member is a standard employer-sponsored member.

    You have not verified the member's address in the past two years.

    Permanent exclusion criteria does not apply.

    The member is lost inactive.

    All lost inactive member tests have been satisfied.

    End of example

     

    Scenario 3

    The member has been a member for over two years.

    You have not received contributions or rollovers for the member in the past five years.

    The member is a standard employer-sponsored member.

    You have verified the address in the past two years.

    Permanent exclusion criteria does not apply.

    The member is not lost inactive.

    The member's address has been verified in the last two years and you have no reason to believe the address is now incorrect.

    End of example

     

    Scenario 4

    The member has been a member for over two years.

    You have received no contributions or rollovers for the member in the past five years.

    The member is a standard employer-sponsored member.

    The member has contacted you and informed you they are travelling overseas for five years, and confirmed their desire to remain a member of the fund during this time.

    The member is not lost.

    The ‘permanent exclusion’ criteria apply, however considering the individual's circumstances, you should review this situation in five years.

    End of example

     

    Scenario 5

    A person starts a new job with employer ABC.

    The person is enrolled by his employer in fund XYZ as a standard employer-sponsored member.

    Two years later, fund XYZ winds up.

    Rather than go into the successor fund, the member decides to use an existing account he had previously opened with the ABC Public Offer Fund as a public offer member.

    The member rolls his super money from fund XYZ into his ABC Public Offer Fund account.

    The member can never become lost inactive.

    The member did not join the ABC Public Offer Fund as a standard employer-sponsored member, so the inactive test does not apply to the member.

    End of example

     

    Scenario 6

    The member joined the industry sub-plan of XYZ Fund as a standard employer-sponsored member.

    The member subsequently left the employer.

    Under the sub-plan rules, because the member has left the employer he can no longer remain in the sub-plan.

    After considering his options, the member rolls his super into the public offer plan of XYZ fund.

    The lost inactive criteria will apply for this member. The member could become lost inactive if a contribution or rollover is not made for a five year period.

    Even though he is now in the public offer section of the fund (and is thus considered to be a public offer member), his membership first began with XYZ Fund through a standard employer-sponsored arrangement.

    End of example

    Reasonable effort to contact the member

    Best practice – ATO guidance

    You should exercise reasonable effort to contact your member, if they become lost for any reason.

    Follow-up action to locate members might include:

    • checking the super provider's own database to see if the member has other accounts with more current information
    • contacting an employer in cases where the employer was contributing to the account
    • engaging a company like Australia Post to undertake database searches to locate the member.

    Factors to consider when determining what action and effort is reasonable may include:

    • the information you have in relation to the member
    • the activity patterns on the member’s account
    • the type of super account – for example, employer-sponsored membership, individual membership
    • the type of employment the member is engaged in – for example, transient employment, long-term with the same employer, working within a particular industry
    • the account balance
    • the costs of the different methods in attempting to contact the member.

    Transfer of lost member

    The law

    Under regulation 1.03A(1), the member of a fund is still taken to be a lost member at a particular time if:
    (c) the member joined the fund from another fund or an EPSS as a lost member; or
    (ca) the member joined the fund from the RSA provider as a lost RSA holder;
    unless
    (d) within the last two years, the super provider has verified that the member's address is correct and has no reason to believe that the address is now incorrect, or
    (e) the member is permanently excluded from being a lost member

    Best practice – ATO guidance

    If the member joined the fund from another super provider as a lost member, then the provider transferring the lost member is required to provide all available information to the trustee of the receiving fund regarding the lost member and their status. For example, the reason why the member is lost – uncontactable (L) or inactive (I).

    If the member being transferred has already been reported as lost at the time of joining the receiving fund, the super provider transferring the member account must report the account as transferred (T), and the receiving fund must report the member as lost (L or I).

    If the member has not been reported as lost at the time of joining the receiving fund –the responsibility for reporting falls to the receiving fund.

    See also:

    Reporting a member as found or transferred

    Refer to Previously reported members in the Frequently asked questions section for specific reporting requirements.

    A member previously reported as either uncontactable or inactive must be reported as found in the following situations:

    • contact with the fund has been re-established and the member has retained their benefit in the fund
    • contact with the fund has been re-established and the member elected to cash their benefit in because it was under $200, or a condition of release was met
    • contact with the fund has been re-established and the member has transferred their benefit to another fund
    • contribution or rollover has been received for a member previously considered lost.

    A member previously reported as either uncontactable or inactive must be reported as transferred in the following situations:

    • the member has been transferred to an eligible rollover fund or a successor fund as a lost member
    • the member’s account has become unclaimed super money and was paid to the ATO or to a state or territory authority.

    It is important your lost members' statement reflects the correct status of accounts transferred to us as USM for the same period, as reported on your USM statement. Lodging your USM statement first helps you to identify which members' accounts you reported and transferred to us, and will enable you to report previously reported accounts which are now USM as 'transferred' for your LMS reporting. This ensures these members' accounts are not displayed as both 'lost' and 'ATO-held monies' on our online services for individuals.

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      Last modified: 03 Jan 2017QC 27204