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  • Transfer balance cap – Commissioner's commutation authority

    APRA-regulated super funds and life insurance companies have additional reporting obligations from 1 July 2017. This is due to the transfer balance cap and event-based reporting framework.

    The transfer balance account report (TBAR) is used to capture information about super amounts moving into and out of retirement phase accounts for both transfer balance cap and total super balance purposes.

    Note: When we refer to 'commutation authority' we are referring to the Commissioner's commutation authority (CCA).

    On this page:

    Reporting methods and lodgment in response to a commutation authority

    Most APRA funds are transitioning to the member account attribution service (MAAS) and member account transaction service (MATS), however reporting a response to a CCA is still required to be reported on the TBAR through the bulk data exchange (BDE) or paper channel.

    Lodge a TBAR and report multiple events by:

    You must have a current Australian business number (ABN) to use an electronic reporting channel. Our electronic reporting channels are the most efficient method of TBAR lodgment, and will automatically send reports to the correct processing area.

    See also:

    Commissioners commutation authority

    We will issue a CCA to you (the super provider) when your member has:

    • exceeded their transfer balance cap
    • received an excess transfer balance determination and default commutation notice
    • not voluntarily rectified the excess by the due date.

    The CCA will detail the amount that must be commuted from the specified income stream for that member.

    Commuting the amount

    You must commute the amount in full including cents. If you don't allow cents to be commuted, you must round up. When there is not enough in the specified account, you must commute as much as possible, ensuring that the minimum pension payment requirements have been met beforehand. When you are partially commuting due to no money being left in the account, you must report the closing of that account.

    When commuting the amount, you should make reasonable efforts to contact the member and discuss their options. For example, whether to retain the commuted amount in an accumulation account or take it as a lump sum. If you can't contact the member, you should commute the amount in a way that you judge to be in the member's best interests.

    There may be other reasons why you are unable to commute the requested amount. See – Complying with the commutation authority.

    Death benefit income stream

    Unless the CCA relates to a death benefit income stream, the member can choose to keep the commuted amount in an accumulation phase account or cash the amount out of the superannuation system. If the CCA relates to a death benefit income stream, the commuted amount must be cashed out of the superannuation system.

    If you have received a member request to commute an amount from the income stream during the same period you have received a CCA, you will need to discuss this with your member. Establish if they wish to have both amounts removed, remembering you must act on the CCA in full and by the due date.

    Complying with the commutation authority

    You must action the commutation authority and report to us using the TBAR by the due date (60 days from the issued date).

    Make sure that you have either:

    • commuted the amount in full – including cents
    • commuted the amount in part – that is, commuting as much as possible from the income stream and closing the account
    • not commuted the amount due to   
      • the maximum release amount resulting in nil (report this as a 'commuted in-part event' with the amount as $0)
      • the member being deceased
      • the commutation authority being issued in relation to a non-commutable capped defined benefit income stream.

    You must also advise your member of the following:

    • member details
    • fund name and ABN
    • member account number, plus if applicable, the unique superannuation identifier (USI) and member client identifier
    • the amount and the date of the commutation
    • if the amount was paid as a super lump sum, the amount of the lump sum and the date it was paid
    • if you chose not to commute due to either
      • the maximum release amount resulting in nil
      • the member being deceased
      • the income stream is a capped defined benefit income stream.

    Note: You must declare on the correspondence that the information it contains is 'true and correct', followed by your signature.

    There is no specific ATO form. You can use your own business processes to comply and you will meet approved form requirements, so long as you include the above details in the correspondence you send to your member.

    See also:

    Non-compliance with a commutation authority

    If you do not comply with the CCA by the due date, your member's income stream will stop being in the retirement phase. This affects their entitlement to exempt current pension income. You may also be liable for penalties or subject to compliance action.

    There is an administrative penalty if you don't notify your member of your response to the CCA within 60 days of the issue of the CCA.

    Note: Don't action a CCA if the due date has passed. To discuss your options, send an email to Super CRT

    If you or your member disagrees with the CCA

    You can't object to the CCA, nor can your member direct you not to comply.

    If you think the amount on the CCA does not take into account a member requested commutation, review your records to ensure that the commutation was done and reported to us prior to the date of issue on the CCA.

    Where we receive a member requested commutation after we issued a CCA, we may be able to revoke or reissue a varied CCA however, this will not give you any more time to comply.

    For example, if we issued a CCA with a due date of 30 November and we receive information that allows us to vary it on 1 November, you will still only have until 30 November to action the varied CCA.

    Consequences of late reporting

    Lodge the TBAR with us as soon as practicable after the event has occurred to ensure your member’s transfer balance account is updated.

    If you do not lodge the TBAR by the required date, your member’s transfer balance account will be adversely affected and they may be penalised. You may also be subject to compliance action and penalties.

    Amending or cancelling an incorrect report

    If information submitted on the original TBAR needs to be amended or the information supplied is incorrect, the original event will need to be cancelled before a new TBAR is lodged with the correct information.

    All information previously supplied for that event will need to be resubmitted exactly how it was originally reported on a new TBAR with the cancellation indicator selected. This is required so we can identify the event that needs to be amended or cancelled.

    If you had previously reported multiple events, you only need to include the details of the event that you wish to cancel. If required, lodge a new TBAR with the correct information after you have cancelled the previous report.

    See also:

    Last modified: 09 Oct 2018QC 54147