Larissa Evans opened the meeting with an acknowledgment to country, welcomed those in attendance and introduced ATO Assistant Commissioners Naomi Westwood and Trevor Schloss.
Amanda Gunn advised she is leaving Mercer on 15 December 2022. Larissa acknowledged Amanda as a long-standing member of the group and thanked her for her service.
Self managed superannuation fund (SMSF)
Naomi Westwood discussed that the ATO has made changes to the SMSF registration process which removes the ability to add the SMSF’s bank account details when applying for an ABN registration. New SMSFs into the system will need to provide the ATO with their bank account post registration via:
- their registered tax agent
- Online services for business
- phoning us on 13 10 20
The ATO needs to be notified of the SMSF's bank account details prior to members requesting a rollover, otherwise the rollover cannot be processed. It’s also important SMSFs have registered for an electronic service address and provided these details to the ATO before their member requests a rollover. Delays may be experienced if this does not occur.
Naomi advised legislation to reduce the downsizer eligibility age to 55 years of age has received Royal Assent. This will take effect from 1 January 2023. The only change is to the age, and not any other eligibility criteria.
Al Ramsay advised as part of Super and Employer Obligations (SEO)’s and Public Groups and Internationals (PGI) continuing work with funds in the PGI Top 1,000 program, the ATO are sharing the Request for Further Information (RFI) questions and the mock Operational Insights Report (OIR) and OIR User Guide with the Superannuation Administration Group (SAG) for information and discussion.
The RFI questions focus on the fund’s organisational governance and controls in place to ensure the quality of reported member data. Further, when issues occur, how they are escalated and managed internally within the fund are important considerations. As the ATO start to receive responses from the RFIs we will consider how best to share relevant insights more broadly across the super fund industry.
Tracie Crowden reinforced the value of accurate, timely and complete member reporting, highlighting the significance of data quality on ATO systems and the income tax consequences at the member and fund level. There will not be any substantive changes to the RFI questions. If any changes occur, they will be tweaks and not fundamental changes.
The group discussed the mock OIR, and the OIR user guide. When interpreting the results in the OIR, reference to the user guide is critical as it provides the ATO’s explanation of how each measure is calculated and incorporated into the OIR.
The ATO welcomes any feedback or questions on the OIR. The ATO clarified that there are no plans at this stage to issue OIRs outside of those funds within the Top 1,000 program with PGI.
Siobhann Unwin advised the ATO Engagement and Assurance focus will move from release authorities to Unclaimed Superannuation Money (USM) and annual balance obligations. We will engage with funds who have outstanding USM lodgment obligations as part of our ongoing annual balance campaign.
We have been engaging with funds to resolve issues with release authorities including non-responses and error messages that were identified as part of our recent ‘excess non-concessional contributions’ work program. Our preliminary engagement activities are almost finalised, and we thank those funds who have worked with us to correct errors and ensure lodgment of outstanding obligations.
Funds were required to report 30 June annual member contribution balance amounts via member account transaction service (MATS) by 31 October. We have identified several funds who have outstanding balances or who have only partially lodged their balances. We will contact those funds to understand what has caused the lodgment issues and work with them to ensure accurate and timely reporting occurs in future.
Funds are required to report and pay USM twice a year being:
- 30 April, for accounts at 31 December
- 31 October, for accounts at 30 June.
Reporting of unclaimed super is vitally important. We aim to ensure the matching of these amounts is as easy as possible, to enable fund members to make informed decisions about consolidating their super money. We will be engaging with funds who have not met their 31 October reporting obligations to understand the issues that prevented lodgment by the due date.
The ATO will continue the positive relationship with industry to examine what steps are in place to ensure lodgment obligations can be met in the future.
Katie Constance provided the following Your Future, Your Super update:
- The YourSuper Comparison Tool has been updated with quarterly fee and net return data from Australian Prudential Regulation Authority (APRA). The data is now current as at 30 September 2022.
- The Phase 2 wholesale service was deployed in December 2022. The ATO’s Digital Partnership Office is in conversation with digital software providers around their interest and potential timelines to be able to connect to the service.
- The current stapled fund interim bulk upload solution will be decommissioned in 2023.
- The ATO distributed stakeholder communications in October to remind employers of their stapled fund obligations, advertise the upcoming wholesale solution and provide early messaging around the decommissioning of the interim bulk solution.
- The ATO has participated in ongoing discussions with Treasury as part of the Your Future, Your Super policy review to provide feedback as administrators of the stapled fund service and YourSuper Comparison Tool.
Communications around wholesale registration issues were discussed, and Katie confirmed work is still underway regarding the onboarding process. There were no updates regarding the Choice form, which should hopefully occur in the new year. As soon as the ATO is aware, the date will be shared with the group. Katie closed the item by reiterating that it has been a huge year for reforms and thanked the group for the positive engagement between industry and the ATO over the past 12 months.
Katie Constance provided the following rollovers version 3 (RV3) update:
- The working group continues to focus on practical rollover issues.
- The current focus of the group is improving the guidance for SMSF members on what can be done prior to commencing any rollover, to reduce the chance of delays. The aim is to ensure the details held by the SMSF, APRA fund and ATO all align, and they are a registered client of their nominated electronic service provider (ESA).
- The group continues to discuss the APRA regulated fund Know Your Client (KYC) process, looking for opportunities to improve that experience for individuals without eroding the security benefits they provide and the legislative obligations that must be met.
- The SMSF verification service (SVS) has now been in operation for over 12 months, with a gradual improvement in the rate of ‘verified’ responses.
The following statistics were highlighted:
- In total the ATO received more than 286,000 verification requests for almost 78,000 different individuals. Of these, almost 175,000 requests have been verified.
- For the 3 months between September to November 2022, 68.6% of responses were verified – an improvement on 57% for the same period last year.
- There are 16 valid ESA providers, of which 7 offer rollover capabilities, however the service has received more than 450 different values for ESA providers.
- Incorrect ESA details were contained in 7,500 SVS requests
- 5,300 requests were for a valid ESA but not an RV3 capable provider
- 2,200 requests did not align to any valid ESA.
Katie reaffirmed the ATO will continue to engage with the working group and how we can support relevant stakeholders into 2023. A question was raised about release authorities via SuperStream, then subsequently being revoked by the ATO.
A question was raised regarding whether an update to the user guide will occur as there is not currently an end-to-end message. Katie advised the ATO has been examining the issue, and once we have a confirmed answer it will be shared with the group.
Shane Moore provided the following update:
- The recent Optus and Medibank breaches have focussed our collective attention on the vulnerabilities and controls across the super operating system.
- Following the Superannuation Industry Stewardship Group (SISG) meeting on 22 November 2022, a working group has been commissioned to map the superannuation lifecycle to better understand the effectiveness of the existing controls in the super operating system in light of the increased volume of compromised identity data in the community.
- The ATO will be providing support and our perspective and experience to this working group.
- The ATO will also be commencing work to bring together a holistic view of the data/record keeping requirements for super funds.
- We are looking to use this as a basis to begin meaningful discussion with funds on opportunities to de-risk their data holdings or data-transfer through the super operating system. This will include understanding the legal framework and any administrative guidance that has been practically implemented by funds.
Larissa noted that the SISG in light of heightened cyber and fraud activity, members are keen to progress work around how the system can respond to compromised data. The SISG looks across all inter-related milestones, with a view to mapping controls and how industry can respond in a meaningful manner to break down vulnerabilities.
Shane Moore will be offline for a number of months to focus on this important piece of work. Julene Vanthoff will step into the role of director of the Advice and Support team during this time.
Shane Moore advised that the ATO is starting work again regarding SuperMatch monitoring and best practice principles. SAG members are reminded to remain vigilant around identity theft to protect their members and that their controls around SuperMatch remain effective.
He reiterated the importance of reporting any suspicious activity connected to SuperMatch to the ATO at SPRenablingservices@ato.gov.auThis link opens in a new window
Successor Fund Transfer (SFT) protocol
A CRT alert issued on 7 December advising the updated SFT protocol has been published.
Members noted the protocol update was timely and very much appreciated. There remain some challenges around re-reporting after an SFT which the ATO will continue to provide support and update guidance as needed.
It was noted that APRA, as co-regulator is seeking feedback on their SFT guidance.
Larissa reaffirmed the benefits of early engagement with service providers, the ATO and working with key regulators. We are always looking for process improvements and welcome industry feedback.
Super Enquiry Service and number of enquiries
Bill Korras provided the following update:
- Super Enquiry Service (SES) working well
- Over 400 enquiries in the last 30 days with the majority relating to MATS and SMSF Manual Verifications
- Currently exploring expanded use of SES features – mainly ATO initiated communication.
Group reflections of 2022
Topics discussed included:
- for a year with no regulatory change there was more than enough work for all stakeholders
- main issues were
- cyber security / breaches
- RV3 implementation
- the ATO’s working groups were effective
- changes around the work test were also beneficial and appreciated.
Group focus topics for 2023
Larissa advised the group that we are keen to hear from members what industry issues, and operational/administrative topics of concern that affect this membership group should be on the 2023 agenda. We also want to hear any key achievements as we review our consultative groups and their effectiveness and productivity so we can get some reassurance that our group is operating effectively.
The group were asked to provide key areas that will shape our forward agendas into 2023. Tracy Holloway will email members separately to gather ideas.
The Superannuation Employment Change Network will continue into the future and chaired by Naomi Westwood.
Members thanked the ATO team for providing quality updates, as it helps in fund planning to adjust business processes when there are relevant legislative changes.
Larissa confirmed 2023 is an opportunity to share the practical implications of the updates we provide. We are looking to benefit the whole industry and not just SAG members.
The group also discussed that cyber security and RV3 should be standing agenda items and agreed there will always be interest in release authorities and SMSFs. It was noted that the outcomes of the OIR and combined assurance review will be particularly important next year.
Larissa thanked members for their attendance and contributions for the year and closed the meeting at 11.43 am ESDT.Key topics discussed at the Superannuation Administration Group meeting 8 December 2022.