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  • Large super fund industry report

    The large super fund industry report summarises the collective outcomes from the 2016–17 risk differentiation framework (RDF) and tailored diagnostic reports. It is designed to be used by super fund trustees, executives, administrators, and reporting and risk managers.

    Each year, large super funds receive a tailored diagnostic report assessing their performance in meeting their reporting obligations to the ATO. These results help the funds understand their performance relative to their industry peers, and indicate reporting performance trends from year to year.

    The large super fund industry report and each tailored diagnostic report help fund executives decide how and where to invest their resources to continue improving their performance.

    On this page:

    2017 RDF results

    The 2017 financial year large fund RDF reporting performance results are based on data extracted as at 31 December 2017. This is the fourth year we’ve provided diagnostic reports to large super funds. As such we are able, for the first time, to provide a four year comparison of funds’ performance which adds another level of richness to the 2017 RDF process.

    As well as giving us confidence in the quality of your member reporting, we’ve been pleased by the positive response from industry about the value of tailored diagnostic reports.

    We want to work with large funds to ensure the integrity of member reporting, and in turn provide a better experience for your members. Our intent is to improve the experience for both funds and members.

    The RDF conceptual and analytical model underpins our engagement strategy with large super funds in relation to super reporting obligations. It assesses fund performance across 13 quantitative indicators.

    Our analysis reveals that overall funds are continuing to perform well despite a slight slippage in comparison to last year. This could be attributed to the change in fund focus and resources to on-boarding onto the new event-based reporting platform. A number of funds were also in the process of winding up and this has impacted their results.

    Anyone dealing with the taxation of large business entities will be familiar with the concept of justified trust. Just as in tax, in the super context we seek sufficient evidence to indicate we can justifiably trust that an entity is meeting its super obligations.

    This approach allows us to focus more on support and partnership activities, and less on compliance. The idea is to encourage continuous improvement in super data governance and risk management, while implementing significant structural changes across the sector. This in turn should yield benefits for super fund members and underpin the retirement incomes of all Australians.

    Given this year’s RDF results, we’re confident that super funds’ member reporting obligations are being met to a good standard, even in an environment of change. We recognise the industry’s commitment to continuous improvement, and we thank you for your efforts.

    Funds have been actively identifying member reporting errors and disclosing them voluntarily. We have moved from 'detection' to a 'self-correction model' and this is evidence of this. We encourage you to continue to do this to improve the integrity of member reporting and ultimately provide a better experience for members.

    What we’re doing to support funds

    We held a webinar on 17 April 2018 to discuss the 2017 large fund diagnostic report. You can watch a video recording of the webinar and download the transcript.

    We met with key clients during April, May and June 2018 to:

    • discuss their results
    • understand their operating environment
    • offer support to assist them meet their reporting obligations.

    Given the overall good quality of this year's results, we do not see a need for audits or a large program of compliance casework.

    However, we are conducting information system risk assessments and specific issue reviews with funds that have not met benchmarks over several years, or may have systemic issues across multiple reporting obligations. We’d like to help them improve their systems and processes.

    A high priority this year continues to be to support funds going through a merger or successor fund transfer (SFT). We're aware of several mergers planned for this year, and we have a special team to provide guidance and support for any fund requesting it. SFT’s present a significant risk to the integrity of the superannuation fund data. The failure consequences are extreme and have the potential to impact on a high number of fund members. We have been working on updating the Involuntary superannuation account transfer (ISAT) protocol to provide guidance in relation to the new event-based reporting obligations.

    We will continue to:

    • help you resolve voluntary disclosures in relation to past reporting errors
    • provide lists of mismatched tax file numbers (TFNs) to help identify potential breaches of contributions standards (it also enables members to track their super and consolidate multiple accounts)
    • provide lists of members for you to investigate issues such as high value lost accounts, lost accounts under $6,000, and potentially unclaimed superannuation money (USM).

    Super in 2018 and beyond

    In addition to implementing the 2016 and 2017 budget changes we are also well on the way to implementing a new contemporary reporting framework. There has been an incredible amount of work over the past year from within the superannuation industry and the ATO, to get ready and implement these changes. Our close working relationship with industry has been pivotal to the best possible administrative design and to date we have seen a smooth transition. So far we have received transfer balance accounts from the majority of APRA regulated funds, which has allowed us to create transfer balance accounts for 1.3 million members.

    The new reporting framework moves away from annual reporting through the member contributions statement (MCS) to event-based reporting using the member account attribute service (MAAS) and the member account transaction service (MATS).

    In recognition of the impact these changes will have on the industry, transitional arrangements are in place. While some funds have already started reporting through the MAAS from April 2018, an extended cutover period has been provided through to October 2018. From 1 July 2018, funds are able to start sending transactions through the MATS and our expectation is that full solutions will be in place by the compliance date of 1 April 2019.

    During this transition, funds will lodge their very last MCS by 31 October 2018 for the 2017-18 financial year.

    Find out about:

    SuperStream

    SuperStream has supported government rollovers since November 2016 following successful upgrades of ATO and super fund systems. Government contributions followed in May 2017, and SuperStream is supporting rollovers from funds to the ATO in early 2018.

    The final stage of the SuperStream program is the implementation of Business to Government reporting and includes a shift for APRA Fund reporting from the current aggregated annualised reporting arrangements to a transactional, event-based reporting framework.

    The new reporting solution meets the original SuperStream intent that superannuation fund member transactions should be easier, cheaper and faster but in a way that supports the current digital environment.

    It is recognised by the ATO and the superannuation industry that this enduring solution will be more capable of absorbing future changes and provide benefits for members including more up to date information on their holdings and super guarantee contributions.

    Member Account Attribute Service (MAAS) and Member Account Transaction Service (MATS)

    The new reporting framework introduces two event based services referred to as the Member Account Attribute Service (MAAS) and the Member Account Transaction Service (MATS). The MATS service in conjunction with the MAAS replaces the current MCS. The transfer balance account report (TBAR), will be available until all superannuation providers have transitioned to MATS, however will remain for the retirement phase event reporting of self-managed super funds (SMSFs).

    The MAAS is now operating and funds have commenced implementation with the peak onboarding period between August and October 2018. The MAAS allows for more frequent reporting of member account phases and additional attributes, delivering information in near real time.

    As part of MAAS, member account changes will only be reported when they occur, this means some members’ account attributes may not be reported or updated until one of those attributes changes. This is a significant shift away from reporting information to the ATO annually, even information that has not changed. As a result, it is important that the initial data (foundation data) used to populate MAAS is accurate and complete. A new legislative instrument has been introduced requiring super providers to report all member accounts and updates to these member accounts within five business days, effective from 1 April 2018 using the MAAS service.

    The ATO will store the latest information relating to a super account. By preventing interactions with ineligible or 'closed' accounts, it will minimise reverse workflows and members will have more up to date information available via ATO Online Services.

    Funds can start reporting member transactions in MATS from 1 July 2018, but must cutover to MATS before the compliance date of 1 April 2019. The peak on-boarding period is expected between November 2018 and February 2019.

    Where a fund has cutover to MATS after 1 July 2018, all transactions that occur between 1 July 2018 and the date cutover will need to be back reported. The ATO and funds have agreed on this transitional approach that also includes more flexible approach to the level of detail to be reported during this time; where a fund has cutover to MATS during the transitional period (that is, before 1 April 2019), they only need to report a minimum level of detail.

    The APRA fund industry has supported adopting an extended implementation period to adopt these changes. Given the services replace a range of current reporting obligations; it is important that a pragmatic approach is taken to both the initial on-boarding as well as the process to catch up data from 1 July 2018. This extended period to implement the services will ensure that funds continue to meet their reporting obligations.

    Super changes

    The ATO continues to work with industry to test and prepare for SuperStream implementations including:

    • developing test scenarios and data
    • managing and orchestrating the testing process between industry and ATO
    • providing guidance on changes and information to assist with implementing and building new changes
    • managing and orchestrating production cutover and business deployment verification
    • establishing triage teams to manage any issue post implementation
    • issuing weekly communications to industry during implementation.

    We are committed to maintaining a strong, coordinated consultation framework across the super industry to provide confidence, clarity and certainty on key dates, approaches and requirements.

    Understanding the RDF

    The 2017 RDF tailored diagnostic reports examine each fund’s:

    • consequence rating based on relative rank using key indicators such as member numbers, contributions value, and lost accounts
    • likelihood rating based on performance against super-related obligations benchmarks.

    Figure 1: The risk differentiation framework

    Figure 1 The risk differentiation framework. The graph shows the 4 risk categories and the likeliness of compliance. The Y axis shows the consequence of non-compliance. The X axis shows the likelihood of non-compliance. The 4 risk categories form a square along these axis'. The bottom left square is the 'Lower Risk' category which reads 92%. The top left square, further up the consequence of non-compliance side, reads the 'Key Client' category at 7%. The bottom right square, along the likelihood of non-compliance, has the 'Medium Risk' category which reads 1%. The top right section has the 'Higher Risk' category which reads 0%.

    The four broad risk categories are:

    • higher risk
    • key client
    • medium risk
    • lower risk.

    The large fund population was rated using several indicators. Funds categorised as higher risk or key client have significant membership and contribution levels, while lower and medium risk categories capture smaller funds. Key client and lower risk funds are those ranked low in likelihood, as they have higher compliance with their reporting obligations.

    The combination of likelihood and consequence indicators also enables each fund to be ranked, determining their overall position in the industry relative to other large funds. Categorisations and rankings are calculated using data reported to us relating to the relevant financial year.

    Tailored diagnostic reports

    To determine each fund’s consequence and likelihood ratings, data for the period ended 30 June 2017 was extracted as at 31 December 2017.

    In March 2018 we issued each fund its tailored diagnostic report. We’ve only made minor changes to the diagnostic report this year, as we focus on redesigning the report to incorporate TBAR, MAAS and MATS reporting for future iterations. Page two has been updated to show results over four years, from 2014 to 2017. This year, we included TBAR lodgment information on the statistics page, showing:

    • the number of TBAR forms processed (this includes processed, cancelled and suspended forms including accumulation phase value TBARs)
    • the total number of accounts reported (this represents the number of accounts reported on a TBAR with a unique TFN)
    • the total number of income streams reported with event types SIS, IRS, ICB, and ICR
    • the total number of member commutations or MCOs reported.

    Administrator reports

    This is the second year we provided a tailored report to a small number of large fund administrators. The report provides an administrator-level view of their compliance with super reporting obligations for all the large funds they administer.

    The report is based on the data lodged by the administrator for the period ended 30 June 2017. It shows where the administrator sits within the super industry compared to their peers. It also shows how the administrator is performing from a super reporting perspective.

    See also:

    What's next

    We have asked large super funds to:

    • review their tailored diagnostic report to determine how their fund is performing against the benchmarks
    • investigate and rectify any areas of concern
    • take action to improve their results where necessary
    • email us at LargeFundDiagnostic@ato.gov.au to discuss how we can support improved fund performance.

    Comparative industry results

    We selected 237 funds as part of the overall RDF population and generated 231 reports (six were not rated due to insufficient lodgment data). Collectively these funds have 27 million members and $1.7 trillion under management.

    Each fund was rated using a common set of 13 indicators and plotted on the consequence/likelihood matrix.

    A comparison of the results over four years (2014–17) shows a steady positive shift of large funds moving out of the higher and medium risk categories into the lower risk and key client categories. The four figures below illustrate comparative scatter graphs for each year. Each dot represents a fund.

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    Figure 2: 2017 comparative industry results

    Figure 2. Comparative results for 2017 The scatter graph represents each fund rated in 2017 RDF. The X axis measurements span from 1.0 to 5.0 and represent the likelihood of non-compliance with reporting obligations. The Y axis measurements span from 1.0 to 5.0 and represent the consequences of potential non-compliance. The graph is broken into 4 sections representing the risk each group of super funds presents. These sections are higher-risk funds, medium-risk, lower-risk and key client funds. Individual super funds are represented in their relevant quadrants by a single dot.  The lower-risk quadrant is in the lower left corner of the graph and extends from 1.0 to 3.0 along the X axis and from 1.0 to 4.0 on the Y axis. The section contains 212 dots each representing a super fund. The key client quadrant in the top left corner extends from 1.0 to 3.0 along the X axis and from 4.0 to 5.0 along the Y axis. The section contains 16 dots each representing a super fund. The higher-risk quadrant in the top right corner extends from 3.0 to 5.0 along X axis and 4.0 to 5.0 along the Y axis. The section contains 0 dot as no super fund is represented in this quadrant. The medium-risk quadrant in the bottom right extends from 3.0 to 5.0 along the X axis and from 1.0 to 4.0 along the Y axis. The section contains 3 dots each representing a super fund.

    Figure 3: 2016 comparative industry results

    Figure 3 Comparative results for 2016 The scatter graph represents each fund rated in 2016 RDF. The X axis measurements span from 1.0 to 5.0 and represent the likelihood of non-compliance with reporting obligations. The Y axis measurements span from 1.0 to 5.0 and represent the consequences of potential non-compliance. The graph is broken in to 4 sections representing the risk each group of super funds presents. These sections are higher-risk funds, medium-risk, lower-risk and key client funds. Individual super funds are represented in their relevant quadrants by a single dot.  The lower-risk quadrant is in the lower left corner of the graph and extends from 1.0 to 3.0 along the X axis and from 1.0 to 4.0 on the Y axis.  The section contains 227 dots each representing a super fund. The key client quadrant in the top left corner extends from 1.0 to 3.0 along the X axis and from 4.0 to 5.0 along the Y axis. The section contains 17 dots each representing a super fund. The higher-risk quadrant in the top right corner extends from 3.0 to 5.0 along X axis and 4.0 to 5.0 along the Y axis. The section contains 0 dot as no super fund is represented in this quadrant. The medium-risk quadrant in the bottom right extends from 3.0 to 5.0 along the X axis and from 1.0 to 4.0 along the Y axis. The section contains 2 dots each representing a super fund.

    Figure 4: 2015 comparative industry results

    Figure 4 Comparative results for 2015  The scatter graph represents each fund rated in 2015 RDF. The X axis measurements span from 1.0 to 5.0 and represent the likelihood of non-compliance with reporting obligations. The Y axis measurements span from 1.0 to 5.0 and represent the consequences of potential non-compliance. The graph is broken in to 4 sections representing the risk each group of super funds presents. These sections are higher-risk funds, medium-risk, lower-risk and key client funds.  The lower-risk quadrant is in the lower left corner of the graph and extends from 1.0 to 3.0 along the X axis and from 1.0 to 4.0 on the Y axis. The section contains 236 dots each representing a single super fund.  The key client quadrant in the top left corner extends from 1.0 to 3.0 along the X axis and from 4.0 to 5.0 along the Y axis. The section contains 18 dots each representing a super fund.  The higher-risk quadrant in the top right corner extends from 3.0 to 5.0 along X axis and 4.0 to 5.0 along the Y axis. The section contains 0 dot as no super fund is represented in this quadrant.  The medium-risk quadrant in the bottom right extends from 3.0 to 5.0 along the X axis and from 1.0 to 4.0 along the Y axis. The section contains 2 dots each representing a super fund.

    Figure 5: 2014 comparative industry results

    Figure 5 Comparative results for 2014 The scatter graph represents each fund rated in 2014 RDF. The X axis measurements span from 1.0 to 5.0 and represent the likelihood of non-compliance with reporting obligations. The Y axis measurements span from 1.0 to 5.0 and represent the consequences of potential non-compliance. The graph is broken in to 4 sections representing the risk each group of super funds presents. These sections are higher-risk funds, medium-risk, lower-risk and key client funds.  The lower-risk quadrant is in the lower left corner of the graph and extends from 1.0 to 3.0 along the X axis and from 1.0 to 4.0 on the Y axis. The section contains 225 dots each representing a single super fund.  The key client quadrant in the top left corner extends from 1.0 to 3.0 along the X axis and from 4.0 to 5.0 along the Y axis. The section contains 14 dots each representing a super fund.  The higher-risk quadrant in the top right corner extends from 3.0 to 5.0 along X axis and 4.0 to 5.0 along the Y axis. The section contains 2 dots each representing a super fund.  The medium-risk quadrant in the bottom right extends from 3.0 to 5.0 along the X axis and from 1.0 to 4.0 along the Y axis. The section contains 8 dots each representing a super fund.

    Key findings

    A comparison of the results over four years shows that funds continue to meet their member reporting obligations to a good standard. This year, almost 99% of funds received a likelihood rating of 3 or better with 77% of funds meeting benchmarks for at least eight of the 13 reporting indicators. This is similar to last year’s results where:

    • fifty two percent of funds have either maintained or improved their results.
    • for the third consecutive year no funds were classified as higher risk.
    • overall results have improved for 8 out of the 13 indicators, including all TFN indicators, timeliness of LISC remittance PVAs, LMS and USM, and Completeness of MCS lodgement (the last two were part of the three areas for improvement from the 2016 RDF results).
    Table 1: Percentage of funds that met the benchmark

     

    Indicator

    2017

    2016

    2015

    2014

    1

    Personal contribution without TFN

    94.00

    93.09

    90.87

    91.30

    2

    Correct TFN quoted

    81.00

    74.10

    69.73

    62.30

    3

    Duplicate TFNs

    90.50

    86.94

    85.43

    89.68

    4

    Non Individual TFNs

    95.70

    94.29

    94.09

    68.65

    5

    Timeliness of MCS lodgment

    89.00

    95.22

    95.79

    93.21

    6

    Completeness of MCS lodgment

    77.30

    66.83

    57.53

    38.83

    7

    Open and lost MCS accounts

    40.00

    42.23

    41.76

    26.96

    8

    Lost members > 65 years old

    57.47

    65.71

    63.77

    75.86

    9

    Lost accounts < $6,000

    48.20

    80.00

    51.21

    43.84

    10

    Timeliness of LMS

    90.50

    83.87

    88.89

    82.26

    11

    Timeliness of USM

    86.70

    80.00

    87.04

    78.52

    12

    Timeliness of co-contribution remittance PVAs

    74.00

    77.96

    68.56

    69.70

    13

    Timeliness of LISC remittance PVAs

    76.40

    74.04

    70.27

    63.72

    Table 2: Indicators explained

    Indicator

    Explanation

    Why is this important?

    Benchmark

    Personal contribution without a TFN

    Percentage of MCSs with personal contribution reported by a fund

    This indicator will help funds identify potential breaches of the contributions standard. It also encourages a best practice approach in accepting and identifying compliant contributions.

    ≤0.05%

    Correct TFN quoted

    Number of quoted TFNs matched with the ATO-derived TFNs

     

    ≥97%

    Duplicate TFNs

    Number of instances where the same TFN is reported for different individuals

    Correct TFN data ensures payments are streamed to the correct accounts and gives confidence to funds in the accuracy of the data provided during contributions and rollovers. It also enables electronic transfers and payments. Additionally, correct TFN data enables members to track their super and consolidate multiple accounts online

    ≤0.1%

    Non-individual TFNs

    Number of instances where the reported TFN is for a non-individual

    Correct TFN data ensures payments are streamed to the correct accounts and gives confidence to funds in the accuracy of the data provided during contributions and rollovers. It also enables electronic transfers and payments. Additionally, correct TFN data enables members to track their super and consolidate multiple accounts online

    ≤0.03%

    Timeliness of MCS lodgment

    Number of original MCSs lodged within the prescribed timeframe

    Timely and complete lodgment of the MCS ensures the ATO is able to assess and pay government contributions in a timely manner. It also ensures member information is displayed in myGov as soon as possible.

    ≥95% within 7 days

    Completeness of MCS lodgment

    Compares the 'number of distinct individuals with open, open & lost and closed pension accounts’ reported on the MCS with the 'number of members’ reported on the fund's income tax return

    Timely and complete lodgment of the MCS ensures the ATO is able to assess and pay government contributions in a timely manner. It also ensures member information is displayed in myGov as soon as possible.

    90%

    'Open and Lost' MCS accounts

    Compares the 'number of lost un-contactable members’ from the Lost Member Register with the 'number of members with account status open and lost’ in MCS

    Accurate reporting of member status of open and lost accounts allows members to view and consolidate accounts in myGov

    90% – 110%

    Lost members >65 years

    Number of members aged over 65 on the LMR

    Accurate and current LMS & USM data is fundamental to the ATO’s important work of reuniting members with lost and/or unclaimed super. This information also ensures members are able to view accurate account information in myGov

    ≤1.91

    Lost accounts <$4,000

    Number of members with an account balance under $4000 on the LMR

    Accurate and current LMS & USM data is fundamental to the ATO’s important work of reuniting members with lost and/or unclaimed super. This information also ensures members are able to view accurate account information in myGov.

    ≤1.91%

    Timeliness of LMS

    Timeliness of the first lodgment (either a lost member statement or non lodgment advice)

    Accurate and current LMS & USM data is fundamental to the ATO’s important work of reuniting members with lost and/or unclaimed super. This information also ensures members are able to view accurate account information in myGov.

    within 7 days

    Timeliness of USM

    Number of original USMs lodged within the prescribed timeframe

    Accurate and current LMS & USM data is fundamental to the ATO’s important work of reuniting members with lost and/or unclaimed super. This information also ensures members are able to view accurate account information in myGov.

    ≥95% within 7 days

    Timeliness of co-contribution remittance PVAs

    Timeframe during which a fund reaches a total of 98% of co-contributions remittance PVAs lodged

    Timely lodgment of remittance payment variation advices (PVA) enables us to redirect payments to eligible member accounts as soon as possible to maximise interest income on member benefits.

    ≥98% within 14 days

    Figure 6: TFN integrity

    Fig 06: TFN integrity  This image is a column graph which shows the total MCS lodged with the number of duplicate TFNs, number of non-individual TFNs and number of instances personal contributions were reported with no TFN. The Total MCSs lodged columns show that in 2014 it was 33.2 million, in 2015 32.5 million, in 2016 32.6 million and in 2017 32.2 million. The Duplicate TFNs graph line shows that in 2014 it was 17,545, in 2015 26,906, in 2016 25,089 and 2017 22,213. The number of non-individual TFNs graph line shows that in 2014 it was 17,462, in 2015 2,016, in 2016 1,877 and in 2017 1,567. The Number of instances personal contributions reported with no TFN graph line shows that in 2014 it was 1,054, in 2015 it was 1,349, in 2016 it was 449 and in 2017 it was 339.

    Figure 7: Risk ranking

    Fig 07: Risk rating This column graph shows the number of  funds rated as lower risk, key client, medium risk and higher risk for the years 2014 to 2017. There were 225 funds rated as Lower risk  in 2014,  236 in 2015, 227 in 2016 and 212 in 2017. There were  14 Key client funds in 2014, 18 in 2015, 17 in 2016  and 16 in 2017. There were 8 Medium risk funds  in 2014, 2 in 2015, 2 in 2016 and 3 in 2017. There were 2 higher risk funds in 2014 and none from  2015 to 2017.

    Figure 8: Number of lost accounts

    Fig 08: Number of lost accounts The number of lost accounts in this line graph shows a slight reduction  from 2014 to 2015, takes a sharp drop in 2016 and then rises again slightly in 2017. The number of lost accounts in 2014 was 1,308,237, in 2015 it was 1,223,338, in 2016 it was 580,455 and in 2017 it was 665,397.

    Figure 9: Number of lost members over 65 years of age

    Fig 09: Number of lost members over 65 years of age This line graph shows the number of lost members over 65 years of age reduced very slightly from 2014 to 2015 then drops sharply in 2016 and then rises sharply again in 2017. The number of lost members in 2014 was 24,112, in 2015 it was 23,847, in 2016 it was 10,987 and in 2017 it was 24,801.

    Figure 10: Lost members <$6,000 threshold

    Fig 10: Lost members <$6,000 threshold This line graph shows the number of lost members with reported account balances of less than $6,000 dropped dramatically from 2014 to 2016 and then rose again in 2017. In 2014 the number of lost members with less than $6,000 in account balances was 327,164, in 2015 it was 224,443, in 2016 it was 17,036, and in 2017 it was 127,796.

    Figure 11: Number of correctly quoted and matched tax file numbers compared with the number of Member Contribution Statements with a tax file number

    Fig 11: Number of correctly quoted and matched tax file numbers compared with the number of Member Contribution Statements with a tax file number This column graph compares the number of correctly quoted and matched TFNs with the number of MCSs lodged with a TFN from the total MCSs lodged from 2014 to 2017. In 2014 there were 29,634,773 correctly quoted and matched TFNs compared to 29,767,654 MCSs with a TFN. In 2015, there were 30,211,615 correctly quoted and matched TFNs compared to 30,325,369 MCSs with a TFN. In 2016 there were and 30,715,789 correctly quoted and matched TFNs compared to 30,853,222 MCSs with a TFN and in 2017, there were 30,883,391 correctly quoted and matched TFNs compared to 31,032,844 MCSs with a TFN.

    See also:

    Key areas for improvement

    The top three areas identified for reporting improvement:

    Lost accounts under $6,000: There has been an increase in the ‘small lost member accounts’ threshold from $4,000 to $6,000, that applies from 31 December 2016. This appears to have led to a dramatic decline in the results for this indicator, from 80% in 2016 to 48% in 2017. The number of small lost accounts on the lost member register has, in fact, increased from 17,000 in 2016 to 127,000 in 2017 as a result of the threshold change. We would like to work with funds to improve this benchmark.

    Lost members over 65 years: This indicator has declined from 65% in 2016 to 57% in 2017. We are aware that some of these accounts may not have become unclaimed super money, as the members may have made contact in the last five years, or made contributions in the last two years.

    'Open and Lost' MCS Accounts: There has been a slight decline in the percentage of funds meeting this indicator, from 42% in 2016 to 40% in 2017. This indicator is important because accurate reporting of the member’s status as open, lost or closed allows members to view and actively consolidate accounts in ATO Super Online. You should ensure that member accounts are reported as closed where a member rolls out of the fund, or is paid to the ATO as Unclaimed Super Money.

    We acknowledge that there may be timing differences that influence the results, and we would like to work with funds to improve this benchmark.

    Key industry focus areas

    Our analysis of the results highlighted some key focus areas for maintaining good reporting performance.

    Find out about:

    Reuniting super

    It is in all our interests to reunite people with their super, whether lost or unclaimed.

    We encourage funds to be proactive regarding their lost members, and envisage that the provision of address functionality built into the MAAS will assist funds in achieving this goal.

    From 1 July 2017 to 31 January 2018, we observed that almost 190,000 individuals were reunited with over 310,000 lost, unclaimed and active super accounts to the value of $1.8 billion.

    Over the past four financial years (1 July 2013 – 30 June 2017) about 1.68 million accounts to the value of $8.12 billion have been consolidated, transferred or claimed by fund members as a result of the system reforms introduced and implemented by the ATO and the super industry.

    Find out about:

    High-value lost accounts

    We regularly review the top 200 lost account balances appearing on the LMR. These accounts belong to members who are uncontactable or inactive. Funds can take action to remove these accounts from the LMR. This will also remove the 'lost' status from the account as displayed in both myGov and SuperMatch.

    Last year's initiative resulted in 96 lost members with the highest account balances being found and removed from the LMR, with an aggregate value of $84.6 million.

    Lost accounts with reported balances under $6,000

    There has been a significant increase of lost accounts with reported balances under the threshold of $6,000 in the LMR. Small lost accounts as at the unclaimed money day should be reported and paid as USM by the due date for that period.

    Accounts that have been transferred to us as USM must then be removed from the LMR. Usually this would have been accomplished by reporting the account as ‘Transferred’ in the subsequent LMS. However, with the SuperStream changes and depending on the timing of your transition to MAAS you will need to determine if these accounts should be closed in the MAAS if they were included in your foundation data load.

    Reporting unclaimed super

    We encourage funds to check the eligibility criteria for USM. Generally, funds should report and pay to us any 'lost' accounts where the account holder is either:

    • over 65 years old
    • deceased
    • reporting a balance less than $6,000.

    Successor fund transfers

    Successor fund transfers (SFTs) present a significant risk to the integrity of super fund data. The failure consequences are high and have the potential to impact large numbers of fund members should an SFT fail.

    A high priority this year continues to be supporting funds going through not only a SFT, but also a change in administrator or a change in IT platforms. Funds are strongly encouraged to contact our Client Relationship Team for help and support by emailing us at SuperCRT@ato.gov.au.

    We are also working on updating the Involuntary Superannuation Accounts Transfer (ISAT) protocol to provide guidance on SFTs. We’ve developed a new content structure that captures all reporting requirements in a single protocol with multiple chapters.

    We will make the protocol content available in a single place on our website to allow easy navigation through the material. We are consulting with industry as we make these changes.

    In March 2018, we provided a draft protocol for industry review by sharing the updated document on ATO’s Let's Talk consultation page. The protocol will be available on our website by August 2018.

    We will continue to help resolve voluntary disclosures and provide comprehensive support as part of our early engagement campaign work.

    See also:

    RDF redesign

    We intend to produce a diagnostic report for 2018 using the existing format. The report will be based on lodgments for the period ended 30 June 2018.

    With the change to event-based reporting as well as the proposed removal of the bi-annual lost member statement, we are re-designing the RDF and assessing the appropriateness of the current report. We have already begun evaluating the 13 likelihood indicators in the context of the reporting changes.

    One of our key aims in re-designing the diagnostic report is to provide funds with meaningful data in a more timely manner, which will assist in quicker identification and resolution of reporting issues. This will enhance member experience by displaying more timely and accurate data on ATO Super Online, enabling members to make informed choices about their superannuation.

    We will be consulting with the industry to obtain valuable feedback before finalising the new design. Our intent is to continue providing large APRA funds with a relevant and contemporary report that will help assess their performance under the new reporting standards. We will continue to share more details on the redesign and intend to move ahead quickly to give further certainty to industry on consultation dates and timeframes.

      Last modified: 02 Aug 2018QC 46621