Guidance on involuntary super account transfers
The ATO has published an Involuntary Superannuation Account Transfer (ISAT) Protocol. The protocol was developed in consultation with the large-fund segment of the industry.
To read the document, see:
The protocol is a guide for super providers and suppliers who will be transferring member accounts without the members' instigation. It will help funds report accurate and timely information for all members to the ATO. It also provides the current ATO view on a number of technical issues related to ISATs, and gives limited guidance on the information about member accounts that needs to be given by a transferring fund to a receiving fund.
Topics covered in the protocol include:
- Use of the Rollover Message Implementation Guide in mergers: does the Data Standard apply to data transferred between funds in a merger?
- Government superannuation payments: how to avoid receiving co-contributions, super guarantee, Low Income Super Contribution, and similar, for members who’ve been transferred out.
- Minimum pension payments in the merger year: the ATO view.
- Capital gains tax and loss relief: what is available in the context of ISATs?
The protocol will particularly assist funds and administrators contemplating a merger, negotiating a deed of agreement, conducting due diligence, or finalising a merger. It contains a checklist of data that should be included in the transfer of member accounts between funds, the administrative obligations on a transferring fund, and the ATO’s position on best practice for ISATs.
The ISAT protocol has been updated to include reference to a government announcement that, from 29 June 2015, tax relief (asset rollover relief but not loss relief) will extend to assets representing accrued default amounts transferred from one product to a MySuper product within the same fund.
The protocol is generally restricted in its subject matter to tax-related issues, because the Australian Prudential Regulation Authority (APRA) is the responsible agency for equivalent member rights and the other prudential aspects of a merger.
Involuntary superannuation account transfer protocol
The ATO has published an involuntary superannuation account transfer (ISAT) protocol.