Welcome and opening remarks
Tracie Crowden opened the meeting with an acknowledgment to country and welcomed those in attendance. Mandy Gunn, Ian Roberts, Nimalan Puvanasuntharam and George Strilakos were noted as apologies.
There were no objections to the meeting being recorded to support the writing of key messages. The audio recording will be deleted once the key messages are endorsed by the Co-chairs.
Tracie Crowden and Sue Pearce noted the refreshed agenda which reflects the group’s areas of focus for 2022. Members were invited to give feedback on the agenda.
Identify change drivers
Sue Pearce noted that the aim of this new standing item was to consider the holistic regulatory change environment, not just ATO administrative changes. This is in order to understand the impact of the whole regulatory change agenda on funds’ clients and products, such as Product Disclosure Statements, communications.
The Group reviewed the ATO’s Superannuation Changes Industry roadmap (covering January to December 2022), and noted other regulators, Australian Prudential Regulation Authority (APRA) and Australian Securities and Investments Commission also have considerable change agendas. The massive list of regulatory change is in addition to ongoing merger and system migration activity. Key discussion points included:
- concern that other regulators may not co-design changes with funds
- significant changes driven by other regulators include
- use of independent financial advisers
- APRA’s Superannuation Data Transformation phase 2
- retirement income covenant.
- there is continuous change due to unintended consequences, especially for legacy products
- complexity of commutation for market linked pensions was noted. Members asked that a tool developed in 2017 be revised for current requirements.
- further changes may come from the upcoming Budget and Federal election.
Members were asked to bring their ‘big ticket’ change items to the next meeting.
Update on changes impacting funds
Sonia Corsini provided an update on the five measures that received Royal Assent on 22 February 2022.
Changes to calculation rules for exempt current pension income
- Trustees that hold all fund assets in retirement phase for part, but not all of the income year, will be able to choose to treat the assets as not being segregated current pension assets for that period. Funds who make this choice will be able to use the proportionate method for calculating Exempt Current Pension Income (ECPI).
- The start date is 1 April 2022 but will apply to assessments for the 2021–22 and later income years.
- Web content for this measure will be updated, in addition to communication via Super News, SMSF News and Tax Practitioner News.
Increase of First home super saver maximum releasable amount
- The maximum releasable amount of voluntary concessional and non-concessional contributions under the first home super saver (FHSS) will increase from $30,000 to $50,000. This will apply to FHSS determinations made from 1 July 2022.
- Web content will be updated accordingly to support communicating the change. Members will be provided with details about updated content.
- Social media activities will also be rolled out over the coming months leading up to 1 July 2022.
- The only change funds will see is potentially higher amounts requested for release, however given a member must have actually made contributions over $30,000 to access the benefits, it may be some time before funds see the change.
- Note – the technical change proposed to FHSS has not progressed at this stage.
Reducing eligibility age for the downsizer contribution from 65 to 60
- From 1 July 2022, individuals aged 60 years or more will be able to access the downsizer measure.
- There are no changes to existing eligibility criteria.
- ATO has an action item from the Superannuation Industry Stewardship Group to look into mismatched timing around the form and contribution being made. This Group will be engaged as part of that ongoing discussion, including opportunities to identify best practice.
Repealing the work test for superannuation contributions
- This change will allow individuals aged younger than 75 to make or receive non-concessional, including using the bring forward arrangements or salary sacrifice contributions, without having to meet the work test.
- Individuals aged between 67 and 74 years will still have to meet the work test to make personal deductable contributions.
- As the regulations to support this change have been released, the ATO can advise that they now check the work test eligibility for individuals aged 67 to 74 at the time they make a personal super contribution deduction on their income tax return. The process to claim a personal super deduction remains the same.
The Group noted there is significant interest in this measure’s interaction with the Notice of Intent deduction.
Removing the $450 threshold for payment of super guarantee
- From 1 July 2022, employers will need to pay super guarantee (SG) for employees even if they earn under $450 per month.
- All existing criteria remains, including SG is still not payable for those under 18 years of age (unless they work more than 30 hours a week) and those engaged to undertake work of a domestic or private nature for you personally (unless they work more than 30 hours a week).
- Employers need to be aware of the change and be ready to pay the correct amount of SG for their employees from 1 July 2022.
- Funds may need to update their member information.
- Web content will be updated including SG tools and calculators, and the employer obligations course and assessment.
- Communication to Digital Service providers has now issued. We will be providing specific messages for employers and individuals via newsrooms and social media channels.
If there are any questions or concerns (including any unintended consequences), either email Sonia directly or the FSE Governance mailbox.
Your Future, Your Super and Super Choice Form Review
Katie Constance provided an update on the Your Future, Your Super project. Key messages included:
- YourSuper Comparison tool has exceeded 1 million views across both platforms. The project team are working with APRA on the next quarterly update to be deployed in March.
- Stapled Super fund requests increased in January, correlating with the SG due date. Employers who did not request stapled super fund details will start to receive educational nudge letters.
- IT specifications and user guide have been exposed for phase two of the Stapling Service (the wholesale solution which integrates the service into business software).
- The Group noted that clearing houses will not be using this (just employer payroll software solutions).
The ATO is undertaking a review of the Superannuation Standard Choice Form, following feedback raised by stakeholders in the Your Future, Your Super measure consultation that there was an opportunity to improve the form.
The immediate priority of the review is identifying short-term opportunities to improve the PDF form. However, the ATO will also use this opportunity to gather broader feedback and identify potential medium-long term change opportunities (such as system or legislative changes) which will be fed into the ATO’s broader program of work.
As part of reviewing the Choice form, the ATO requested feedback from the group and their networks focused on:
- how well choice obligations and the process are understood?
- form content
- other support required by users of the form.
Feedback received will be considered before the next round of individual user testing.
Post meeting notes:
- Super Choice Form Review consultation questionnaire was forwarded to group members with a due date of close of business, 7 March 2022. Any feedback received after this date or any longer-term changes, will be noted but may not be incorporated into the first update of the form.
- Recently released ATO podcast Episode 39 – What’s new in super? explains what a stapled super fund is and what its introduction means, plus some of the key features of the YourSuper Comparison tool.
Fund engagement updates
Shane Moore noted:
- SuperMatch annual Statement of Compliance is due 28 February unless an extension is sought.
- During March the ATO will look into rationalising SuperStream guidance and will share the upshot with the Group before implementing any changes.
- ATO will organise a working group to discuss funds’ perspective about the increase in suspicious activity that previously led to the temporary suspension of SuperMatch in May 2020. It is critical that any vulnerabilities are identified, and additional controls implemented.
Post meeting note – SuperMatch working group convened on 4 March 2022.
Shane Moore raised moving the time of the electronic portability form (EPF) batch run by 1 hour from 11.00am to 12.00pm, because it currently falls in a peak processing time. The Group had no concerns with the change and asked to be told when the change would occur. A CRT Alert will be issued to communicate the change to industry more widely.
Post meeting note – Following internal consultation, the EPF batch run will remain at 11.00am.
Bill Korras gave an update about the Super Enquiry Service. Key messages included:
- Service receives approximately 350 request enquiries per month. There are 404 users currently registered for the Service.
- Most enquiries were about SMSF verification requests, Division 293, FHSS, Member Account Attribute Service (MAAS) and Member account transaction service (MATS).
- There was some system slowness at the end of January, early February. A fix was implemented, and issues have been rectified. The group thanked John Binu for continuing to action issues promptly.
- ATO call centres are still receiving requests for compassionate release without members firstly checking if they meet eligibility requirements.
- If group members have any concerns including about aged enquiries, reach out directly to Bill or add comments to enquiries.
Update on assurance work
Anna Pace gave an update on campaign work. Key messages included:
- In the next quarter, unlinked annual balances due to no corresponding MAAS will again be a focus, particularly SG and personal contributions. This will build on progress made in 2021 with annual balances which determined most were unlinked due to not having a corresponding MAAS.
- With SG and personal contributions, most were unlinked because member account numbers are a bit different in MATS. Contact will be made where funds have a high dollar value of these types of unlinked MATS transactions.
- Partial lodgment of annual balances is also being looked at, with some funds having large volumes. Examples can be given on case-by-case basis.
- Funds are also being contacted about lodging test data to either delete or validate the data. If you confirm that it is test data, please cancel these transactions.
- Deceased accounts and non-individual names or TFNs in the MAAS, continue to be followed up. Deceased accounts must be closed with the exact details used to open the account using 'Trustee of' or 'Deceased Estate of' will cause unmatched data.
- Funds will be contacted soon about January electronic release authorities (RAs).
Ian Morgan also provided the following update:
- With RV3 now in production, the project team are working through known issues via our consultative forums to determine and communicate practical solutions, for example about PRN mismatches.
- SMSF verification service has had approximately 94,000 requests and the verification rate is increasing - it is about 68% for February. We hope to conduct analysis on the causes for non-verified responses in order to reduce non-verified responses going forward.
- Since 1 July about 100,000 RAs have issued
- 86% have been to APRA funds – of these 90% came from an ATO online election request, and 99% were issued over SuperStream.
- SMSF statistics are lower – 57% come from an ATO online election request with 51% issuing through SuperStream.
- APRA fund response rate for electronic RAs is on average just under 5 business days and paper is 35 days. For SMSFs, it is 10 days for SuperStream and 39 days for paper.
- Outstanding RAs are being followed up with funds by Anna Pace’s team.
- Closure of eligible rollover funds – all lodgments have now been received, and the project is tidying up loose ends.
Forward program of work, priorities, industry issues and sharing best practice
Sue Pearce and Alastair Ramsay went through the forward work program and priorities that were developed pre-COVID. The intent of this new item is to:
- consider if the issues were still relevant and priority still correct
- identify any 'quick wins' the group could work on to improve the member experience.
Members agreed the following issues should stay on the forward work program:
- DASP and Compassionate early release
- closed account remediation, especially for reversionary accounts
- rollover MIG 3 – Implementation and operationalisation
- SuperStream failed validation at the ATO – need to identify and collate the various scenarios experienced by funds.
For the following issues members agreed:
- transferring payments to the ATO could be closed
- defined benefit grandfathering (Grandfathering flag to be removed from MAAS and placed on MATS) could either be
- shelved until the next update of MAAS and MATS documentation
- closed as long as existing processes with the ATO remain in place
- SuperStream roll-in files from ATO to have additional information – close (subject to UniSuper’s agreement).
Attributes of release authorities within MAAS to increase functionality – on the shelf for the time being. A future workshop would be needed to explore this, particularly the impact on legacy products.
Post meeting note:
- Group members were asked to send feedback on the forward work program and priorities to FSE Governance by close of business, 6 April 2022.
Other business and close
Tracie Crowden noted the annual APRA fund client experience survey will issue on 21 March. Everyone is encouraged to give feedback on what the ATO is doing well, and what areas can be improved.
Members will be sent a link to the survey when it opens and will see other communication during the survey period.
Post meeting note:
- messaging about the survey will include a link to Superannuation fund survey  so recipients know the survey is genuine.
Tracie Crowden and Sue Pearce thanked members for their attendance and contributions.Summary of the key topics discussed at the Superannuation Administration Group meeting 23 February 2022.