Key messages from Superannuation Administration Group meeting 18 April 2023
Larissa Evans opened the meeting with an acknowledgment to country, welcomed those in attendance.
The Superannuation Administration Group (SAG) charter was shared with members for endorsement on the terms and conditions. The Charter was accepted with no changes or objections.
The Change Integration Office advised the ATO is working with Treasury regarding the co-design of the Better Targeting of Tax Concessions measure.
The federal budget is a few weeks away and we will advise the group of any item that may arise and is of relevance.
Work has begun to leverage our PGI existing combined assurance reviews (CARs) to explore the level of governance funds have over their member reported data.
The fund responses may inform principle-based guidance that could outline a minimum standard of governance and be supported by best practice examples.
The four main governance areas under review are:
- Governance frameworks
- Data collection and protection
- Mergers or Successor Fund transfers
- Change Management.
A question was asked about the numbers of funds that have been reviewed as part of the PGI Top 1,000 programme. Tracie Crowden advised approximately 17 at this stage. Reviews are commenced at a staggered pace as case officers become available to undertake them and it is expected the program will continue to run through this calendar year.
The ATO Engagement and Assurance focus for the next three months will include release authorities and unclaimed superannuation monies (USM).
We will work with funds to rectify issues identified as part of our ongoing release authority program relating to excess non-concessional contributions (ENCC) default elections.
Identified funds will be contacted in the coming weeks and will be required to provide assurances about systems and processes they have in place to ensure accurate release authority responses.
During the USM campaign undertaken by the ATO for the previous due date of 31 October 2022, the most common mistakes made by funds included:
- the use of incorrect unclaimed money day
- the use of incorrect USM codes to properly identify the type of unclaimed money reporting
- the USM data message submitted did not correspond with a payment reference number (PRN)
- a failure to submit a non-lodgment advice if no USM had to be reported.
Funds were reminded that the lodgment due date of 30 April 2023 is fast approaching for outstanding USM obligations.
Campaign activity will commence after the due date of 30 April 2023, and we will engage with funds that have not met their USM reporting obligations.
Question raised about the abolishing of red tape in our processes and whether that extends to the USM non-lodgment advice. Larissa advised this requirement is legislated and there are no plans to change this.
Stapled Fund Phase 2
The wholesale solution remains on track to be available for digital service providers (DSPs) to connect to from late April 2023.
Once DSPs build and connect to the service, the wholesale stapled fund solution can be integrated directly into their business software for employers to use.
Availability has been promoted via the ATO’s DSP newsletter on Thursday 13 April, with further engagements and communications planned over the coming weeks.
Initial onboarding of DSPs may be incremental over the following 4 to 6 months due to software developer focus on tax time initiatives and other internal priorities.
ATO Standard Super Choice Form
An updated version has now been published along with supporting web content and external awareness communications.
Review of Your Future, Your Super reforms
The Assistant Treasurer announced the outcomes of the review on Tuesday 4 April. As part of these outcomes Treasury published a summary of responses to the consultation paper.
There are no immediate policy changes to the ATO Your Future, Your Super deliverables of the YourSuper Comparison Tool or Stapling framework.
In response to the large-scale data breaches involving Optus and Medibank, the Superannuation Industry Stewardship Group (SISG) established a Fraud and Security Working Group. This working group is tasked with understanding the impact these data breaches present across a members superannuation lifecycle and how they could be addressed.
Several new vulnerabilities were identified, which the working group are using as a basis to inform new controls to strengthen the overall system. The SISG has endorsed a detailed assessment on implementing 3 priority opportunities:
- Know Your Client at key milestones
- Multi-factor authentication and member confirmation before significant transactions
- Information sharing.
The working group will hold targeted conversations with associations and SISG nominated representatives to understand what we be done to implement these opportunities, challenges or irritants, and potential timeframes.
Following these conversations recommendations will be presented to the SISG for consideration.
- Delays in rollovers would be caused by know-your-client requirements which impact the 3-day rule.
- Proof of identity (POI) was raised by members as an item which is causing resourcing issues and work bottlenecks for funds.
- Members noted clients are sometimes reluctant to answer texts and emails thinking they are scams, when funds are trying to determine POI for rollover purposes, especially for larger transactions.
- It was acknowledged that these are issues outside the scope of the SAG, and a separate forum would need to address. It was suggested this forum could take place when the next SAG meeting convenes in Sydney in late June. The Chair will consider and advise the group.
- If not already engaged through targeted conversations, SAG members were encouraged to provide thoughts or considerations through firstname.lastname@example.org.
Trustees must ensure their SuperMatch monitoring, and controls are adequate, actively testing the effectiveness of controls, and continuing to identify opportunities to strengthen their processes around usage and access of the service.
We have previously worked to develop a set of monitoring guidelines and controls for SuperMatch – setting out some minimum expectations around access and use of the service.
This was delayed but has now commenced and we are looking to share details by the end of May.
Bill Korras acknowledged the group for their patience and condolences whilst his team were dealing with the sudden passing of one of their colleagues.
He advised there were no major concerns or issues for the enquiries his team have received since the last SAG meeting.
There will be a change to the log on screen on 22 April and messaging will be communicated to the group via Superfund news.
Post meeting note – A follow up email was provided to members with further details.
Recent experiences have reaffirmed our commitment to working with industry to review current successor fund transfer (SFT) practices and refine our guidance where needed.
We are seeking feedback on specific and more general aspects of the SFT process with a view to forming an industry agreed approach on good practice. All feedback received so far has been appreciated.
Recent SFTs issues, in particular the use of NIL certification in the fund details register.
Noted the use of NIL causes significant disruption, particularly for employers and clearing houses.
NIL was not designed nor intended for funds to manage close activities for a unique superannuation identifier (USI). The fund validation service (FVS) user guide states the meaning of Nil certification as ‘has not achieved certification for rollover or contributions’ only.
A question was raised regarding if a USI is end-dated and it’s not on the FVS, funds cannot respond to or from any messages to that old USI. Julene Vanthoff, ATO confirmed that funds can still send responses with the help of their gateway, and that funds will need to engage with their gateway on this aspect.
Larissa Evans then discussed how we obtain feedback on various issues regarding SFT’s, especially involving clearing houses. The ATO will consider bringing clearing houses and funds together to determine how we best achieve this. Any feedback is welcome.
An Australian Prudential Regulation Authority fund client experience survey should issue to stakeholders in the first week of May. We request and encourage all members to participate in the process. A Super news article will also issue to support this initiative.
There will be a SAG membership refresh process commencing soon. Expression of interest nominations will issue, and it is a chance for current or prospective members to consider their membership, contributions, and engagement with the group.
We are considering the next SAG meeting scheduled for 27 June to be a face-to-face meeting in Sydney. Whether workshops for other relevant issues can occur is still being determined. We are also ensuring those that cannot make the meeting in person will still be able to log in.
There is an upcoming Federal budget in May. Any relevant items that arise relevant to the SAG membership will be distributed to the group.
A question was raised regarding the tax time health check. Funds would like information so they can prepare their client contact centres for an increase in call volumes from members checking their super details.Key messages from Superannuation Administration Group meeting 18 April 2023