A Successor Fund Transfer (SFT) occurs when member accounts are transferred from one registrable super entity (RSE) to another RSE with a different Australian business number (ABN) without their members' consent.
When the same entity is the trustee for more than one RSE, an SFT can also occur when their members' accounts are transferred from one RSE to another within the same group.
An Intra-Fund Transfer (IFT) happens when there is no change in the RSE ABN but there are resulting changes to the Unique Superannuation Identifier (USI) or account identifiers.
This may also be known as product consolidation or streamlining activity. Detailed information about IFTs and how these are managed in relation to retirement events can be found at the end of this chapter.
When you are considering an SFT or an IFT, engage with us early as these can have significant impacts on your members
A member’s account can also be transferred to the ATO in accordance with the Superannuation (Unclaimed Money and Lost Members) Act 1999. However, this type of transfer is not covered as part of this chapter.
Regulation 6.29 of the Superannuation Industry (Supervision) Regulations 1994 (SISR) states – a member's benefits must not be transferred from a fund unless a member's consent has been given.
Exceptions apply to successor fund transfers/intra fund transfers and transfers to MySuper products when member consent is not required but specific criteria are met.
Transfers to MySuper products are outside the scope of this chapter and do not involve an SFT. These transfers should be considered in the context of normal fund reporting, as outlined in the rest of the fund reporting protocol.
When the trustee of the transferring fund transfers cash and other assets to a successor fund, the transferring fund makes a payment that is a super benefit, of each member's benefit to the successor fund. The payment of each member's benefit is a rollover super benefit.
Neither an SFT nor IFT has occurred when a change registry system, platform or service provider has taken place. This guidance does not cover these situations.
For broader guidance refer to:
- Transferring fund & Successor fund checklist
- SPG 227 Successor Fund Transfers and Wind ups (PDF, 497KB)This link will download a file
- Regulation 6.29 of the Superannuation Industry (Supervision) Regulations 1994
- Unclaimed superannuation money protocol
- Lost members register – protocol.
For any unique reporting issues that arise as part of the SFT/IFT, lodge an enquiry through the Super Enquiry Service with any questions or requests for advice.
Updating member account transactions
Before closing member accounts, the transferring fund must ensure the reporting of member account transactions is up to date and accurate at the time of the transfer.
Common issues encountered during these activities include:
- delayed processing times during peak lodgment periods
- the requirement to address error responses.
Funds should work closely with Digital Service Providers (DSPs) to avoid such issues.
In line with normal member transaction reporting obligations, contribution information is required to be reported within 10 business days or such later date as the Commissioner may allow, of allocation to a member's account. These requirements are outlined in detail in the MATS Business Implementation Guide (DOCX, 388KB)This link will download a file (MATS BIG).
Reconciliation of ATO super, USIs and USM accounts
Funds must ensure that their accounts for which they have a superannuation role are fully reconciled as part of closure activities.
Funds can access Online Services for Business (OSB) to support requisite activities, such as checking super balances (including credit balances) and resolving all outstanding balances including confirming all payments made to the ATO are accounted for. This should be completed before updating or removing USI details on the Fund Validation Service (FVS).
We will not reactivate your certification values for a USI to support lodgment and payment activities that should have been finalised prior to the completion of your SFT.
If you are unsure of your obligations, raise a Super Enquiry Service request for advice.
To view your online statements at a transactional level, select 'Accounts and payments', then 'Super fund administration accounts'.
You can access:
- super, USI, and unclaimed superannuation money (USM) accounts
- transaction listings available for download or export
- payment details for each sub-account or role
- transactions at the account or role level for download.
Funds should aim to keep linked bank accounts open until all reconciliation activities have been completed. This ensures that payments can still be made to the ATO, or credits issued back to the fund and enables the receipt of trailing contributions made by employers.
More information about employer contributions and best practice can be found in the limited-service period section.
Reporting account balances
In the interests of enhancing the member experience, the successor fund may choose to report the opening balance of an account, particularly in instances where an account has been opened early in a financial year.
If the balance isn't reported early, the new account will not show with a balance on ATO online services until the legislated 30 June balance is reported (due by 31 October) which in some cases may be up to 16 months later.
If the successor fund chooses to do this, they must not report with an effective date of 30 June as this may result in erroneous duplicate reporting and provide inaccurate or misleading information to members.
We also expect when reporting such balances that funds will use an effective date that accurately represents the date at which that balance was determined.
Note: funds will still need to report a 30 June balance on or before 31 October following the end of that financial year to meet their reporting obligations.
Example – accumulation accounts closed on 30 July 2022 and new accounts opened on 31 July 2022
Provider A is transferring its members to Provider B as part of a successor fund transfer. Provider A closes all its member accounts as at 30 July 2022.
Provider B opens the new accounts on 31 July 2022. The accounts for Provider A will no longer be displayed on the ATO online 'Fund details' tab and the accounts opened in Provider B will display in the Fund details tab but with no balances.
For an improved member experience, Provider B chooses to report opening balances for these new accounts as at 31 July 2022 so that its members can see the balances prior to the legislated annual balance reporting date for these accounts of 31 October 2023.
For more details, see Reporting account balances.End of example
Updating member account attributes
As with member-instigated rollovers, funds undergoing an SFT/IFT will have a requirement to report open or closed accounts and account changes, as outlined in the MATS Business Implementation Guide (DOCX, 388KB)This link will download a file and Member Account Reporting and Validation Protocol.
Member account identifiers
It is not mandatory for a successor fund to use the same member account identifiers as the transferring fund.
For more details refer to Reporting account changes.
Reporting closed accounts
The transferring fund should close member accounts via MAAS reporting before the successor fund opens new member accounts. This reduces the risk that members will see old account information on ATO online services.
The transferring fund must report the account as closed using the:
- ABN of the fund
- fund unique superannuation identifier (USI)
- member account number
- account phase and account status.
The transferring fund should monitor the reporting of closed accounts for any errors and is responsible for their resolution. The transferring fund will need to advise the successor fund of any issues, as these accounts will remain open in the transferring fund until the issue is resolved.
For more details see, Reporting closed accounts.
Reporting open accounts
The successor fund should report the new open member accounts via MAAS reporting shortly after the transferring fund closes member accounts. This ensures that the new member details are provided to the ATO, allows payments to be made to the new accounts, and for account information to display on ATO online services.
If the successor fund has been advised by the transferring fund of errors in reporting closed accounts, the successor fund may wish to advise their members that for a short period of time they may see 2 open accounts while the issues are being remediated.
If there are any anticipated delays in MAAS reporting outside the 5 business days legislative requirement, funds must apply to the ATO for a deferral of their MAAS reporting obligations via the Super Enquiry Service.
For more details refer to:
Fund A is undergoing an SFT to Fund B. Fund A must report member accounts as 'closed' via MAAS within 5 business days or such later date as the ATO may allow.
Fund B must report member accounts as 'open' via MAAS within 5 business days or such later date as the ATO may allow.
Funds A and B have discussed and agreed when they expect the closing and opening of member accounts to occur.
Fund A advises Fund B as soon as the member accounts have been closed to allow the new member accounts to be opened shortly after (and within the 5 business days).
Fund B is unable to meet their reporting obligations and lodges a deferral request via the Super Enquiry Service using the deferral form Requesting a deferral of your member reporting obligations.End of example
For the purposes of the Superannuation (Unclaimed Money and Lost Members) Act 1999, a member of a super provider is a lost member if the member is:
- a lost member within the meaning of regulation 1.03A of the SISR
- a lost RSA holder within the meaning of regulation 1.06 of the Retirement Savings Account Regulations 1997.
These regulations define a member of a super provider to be a lost member at a particular time (subject to limited exception) if they:
- satisfy the definition of being ‘uncontactable’
- satisfy the definition of being an ‘inactive member'
- joined the fund or RSA from another super provider as a lost member.
If a lost member's superannuation benefit is transferred to a successor fund, the member’s ‘lost’ status moves from the transferring fund to the receiving fund. The successor fund will need to open the new account with the lost status member account attribute as lost since the member was already lost in the transferring fund.
For more details refer to Reporting account changes.
Unclaimed superannuation money (USM)
Payment of accounts under the Superannuation (Unclaimed Money and Lost Members) Act 1999
Trustees should consider the guidance below when assessing accounts for USM purposes when an SFT has been undertaken. The below guidance will apply regardless of whether the successor fund has the same trustee as the transferring fund.
Members aged over 65 years old
Under subsection 12(1) of the SUMLMA, an amount payable to a member of a fund (including accumulation, defined benefit, and pension members) is taken to be unclaimed money if all the following apply:
- the member has reached eligibility age
- you have not received an amount in respect of the member (and, in the case of a defined benefits super scheme, no benefit has accrued in respect of the member) within the last 2 years
- after a 5-year period since you last had contact with the member, you have been unable to contact the member again after making reasonable efforts.
The transfer of a member’s superannuation benefit to a successor fund is considered an amount received in respect of a member for the purposes of the successor fund determining the 2-year period under subsection 12(1) of the SUMLMA. Similarly, the 5-year period specified for contact would commence from the date of the SFT.
Under section 14 of the SUMLMA, an amount payable in respect of a member of a fund is taken to be unclaimed money if all the following apply:
- the member has died
- you determine that, under the governing rules of the fund or by operation of law, a benefit (other than a pension or annuity) is immediately payable in respect of the member
- you have not received an amount in respect of the member (and, in the case of a defined benefits super scheme, no benefit has accrued in respect of the member) within the last 2 years
- after making reasonable efforts and after a reasonable period has passed, you are unable to ensure the benefit is received by the person who is entitled to receive the benefit.
The transfer of a member’s superannuation benefit to a successor fund is considered an amount received in respect of a member for the purposes of the successor fund determining the 2-year period specified under s14 of the SUMLMA.
Inactive low-balance accounts
Section 20QA of the SUMLMA provides the definition of an Inactive low-balance account (ILBA) as an account that meets all the following criteria (subject to limited exceptions):
- No amount has been received for the last 16 months.
- The account balance is less than $6,000.
- The account is not a defined benefit account.
- The member has not met a prescribed condition of release.
- Insurance is not being provided in the account.
- The fund is not an SMSF or small Australian Prudential Regulation Authority (APRA) fund.
The transfer of a member's superannuation benefit to a successor fund, is considered as an amount that has been received for the purposes of the successor fund determining the 16-month period specified in section 20QA of the SUMLMA.
Lost member accounts and USM
The money held for a lost member remains with the successor fund, unless it meets the definition of a lost member account (balance of small accounts and inactive accounts of unidentifiable members) at the end of an unclaimed money day. In these cases, it is paid to the ATO as USM.
Small lost member account
You must report and pay to the ATO amounts that meet the definition of lost member account – small account.
Under subsection 24B (1) of the SUMLMA, an account in a fund is taken to be a lost member account – small account if all the following apply:
- the member on whose behalf the account is held is a lost member
- the balance of the account (on the unclaimed money day) is less than $6,000
- the account does not support or relate to a defined benefit interest.
At the end of an unclaimed money day, you must identify any accounts that belong to lost members where the balance is less than $6,000.
Insoluble lost member accounts
You must report and pay to the ATO amounts that meet the definition of a lost member account – inactive account of an unidentifiable member. This type of lost member account is commonly referred to as an insoluble lost member account.
Under subsection 24B(2) of the SUMLMA, an account is taken to be an insoluble lost member account if all the following apply:
- the member on whose behalf the account is held is a lost member
- you have not received an amount in respect of the member within the last 12 months
- you are satisfied it will not be possible, considering the information reasonably available, to pay an amount to the member
- the account does not support or relate to a defined benefit interest.
The transfer of the member account to a successor fund is considered an amount received in respect of a member for the purposes of the successor fund determining the 12-month period specified under subsection 24B(2) of the SUMLMA.
SFT and USM reporting
If an SFT occurs between the unclaimed money day and the scheduled statement day, the successor fund does not have reporting or payment obligations with respect to unclaimed money, lost member accounts and inactive low-balance accounts for that unclaimed money day. The reporting and payment obligations remain with the transferring fund.
For SFTs that occur on 30 June, or on an unclaimed money day, engage us via the Super Enquiry Service to discuss your reporting obligations.
Former temporary residents and section 20C notices
If a transferring fund holds outstanding section 20C notices from the ATO identifying former temporary residents, the transferring fund should respond to the notices prior to the SFT.
Where a transferring fund cannot process a section 20C notice for a particular member due to a pending claim, the transferring fund must respond to the section 20C notice with error code SUPER.GEN.RLVR.7 – see Rollover User Guide (PDF, 880KB)This link will download a file
For example, a transferring fund may have a pending Departing Australia Superannuation Payment claim which will be paid to the member prior to the SFT, rather than to us as USM.
If, after responding to the notice with an error code, the pending claim is unsuccessful, the following actions can be taken:
- If the transferring fund still holds the account, they can pay the amount to us as USM in the next reporting period via the Rollover Transaction Request using USM reason code ‘R’.
- If the SFT has taken place and the account has been transferred, the successor fund can pay the amount to us as USM in the next reporting period via the Rollover Transaction Request using USM reason code ‘R’.
Note: A new section 20C notice will not be issued to the successor fund. For more details refer to Lost members register – protocol.
Funds should plan for continuous availability of a USI through the successor fund transfer process. Any limited-service period should prioritise minimal impact to employers and members and should not result in any black-out period that prevent employers from making contributions.
Significant event notices and general communications are not always sufficient to prevent employer contributions being made during the transition period. It may not be feasible for employers to cease making such payments for their employees, particularly if the transition occurs close to a quarterly superannuation guarantee due date.
Failure to pay super to the right fund on time may disadvantage the employer as they must lodge a superannuation guarantee charge (SGC) statement and pay the SGC to the ATO if they fail to do so.
We recommend that you work closely with your gateway provider and the ATO to discuss how you will action messages and payments both during and beyond the SFT date and what services may be implemented.
Note: Contributions made through any clearing house may be rejected back to the employer, as they cannot be redirected to a successor fund.
For ATO-held contributions, funds should lodge an enquiry through the Super Enquiry Service to advise of the limited-service period so that we can supress ATO held contributions. Suppressions cannot be applied to processes such as Release Authorities, DASP applications and Early release of superannuation approval letters and it is important that funds have the capacity to manage these during the transition period.
A limited-service period may also impact the transferring fund's ability to comply with a commutation authority.
- Must ensure that commutation authorities with a due date that falls within the limited-service period are complied with before it impacts their ability to do so.
- Are encouraged to ensure that any excess transfer balance commutation authorities with a due date after the SFT date are complied with before the SFT. If they are not, the member is likely to be in excess for longer and will pay more excess transfer balance tax. It is also likely that a commutation authority will be sent to the receiving fund.
Funds should lodge an enquiry through the Super Enquiry Service if they need advice on commutation authorities issued to them which need to be complied within the 60 days before the SFT date or for any other requests they may receive.
The SuperMatch service enables super fund trustees (excluding self-managed superannuation funds) to obtain details of active superannuation fund accounts. This includes lost accounts or any ATO-held monies for an individual.
The use of SuperMatch is restricted to trustees of super funds. It can be used for beneficiaries (members) of the fund, or individuals who are applying to become a member of that fund. Providing this information to super fund trustees helps members consolidate super accounts of their choice.
The successor fund will need to obtain the member’s explicit consent before any SuperMatch search can be undertaken.
Customer verification requirements
Before using SuperMatch for an individual, trustees must successfully complete customer verification. This ensures they are providing access to the SuperMatch service and the results to the person they are dealing with. Usually, this customer verification is completed by the fund trustee.
However, there are limited circumstances where a fund trustee can be assured (and can demonstrate to the ATO) that the required level of customer verification has been completed by another entity. For example, by the trustee of a transferring fund prior to an SFT occurring.
For an SFT, we expect the trustee of the successor fund to:
- have an in-depth understanding of the customer verification policy and procedure used by the transferring fund and be assured that they meet the requirements of the SuperMatch terms and conditions (PDF, 421KB)This link will download a file of use
- have an assurance that the policy and procedure were followed by the transferring fund
- obtain relevant evidence of the above and be able to provide that to the ATO
- lodge an enquiry through the Super Enquiry Service for any specific guidance regarding member consent, member verification processes and any changes in usage patterns.
Member TFNs transferred to the successor fund during an SFT are considered to be provided by the member unless it was given to the original fund as a 299TA or 299TC notice from the ATO and has not been confirmed by that member.
The trustee will need to provide the ATO with an updated application to SPREnablingServices@ato.gov.au if there are changes that may impact the fund’s pattern of use for the SuperMatch service such as:
- an SFT
- a change in DSP
- other significant changes.
For more details refer to SuperMatch user guide (PDF, 432KB)This link will download a file.
Transfer of pending payments
Terminal medical condition (TMC)
Problems may arise in an SFT where members have provided their fund with TMC certification, been determined to meet the TMC condition of release and advised the transferring fund the benefit does not need to be immediately withdrawn. As the member has met a condition of release, the benefits are considered unrestricted non-preserved and do not meet the definition of a rollover super benefit.
Therefore, if the transferring fund transfers a pending TMC benefit payment, it will be considered a non-concessional contribution, and may result in the member exceeding their non-concessional contribution cap.
If the member believes this contribution will cause or has caused them to exceed their non-concessional cap, they can apply to the Commissioner for an excess contributions determination to disregard the contribution due to special circumstances.
If an SFT occurs and a member who suffers from a TMC receives a lump sum payment while the certification period has not expired, the income would be classified as non-assessable non-exempt income under 303-10(2) of the Income Tax Assessment Act 1997. The certification requirements apply to the member as per regulation 6.01A of the SISR, rather than the fund.
Disability superannuation benefit
A disability superannuation benefit is defined as a superannuation benefit under 995-1 of the ITAA 1997.
Where a disability superannuation benefit is pending and an SFT is due to occur, the transferring fund can rollover the disability superannuation benefit to the successor fund. The benefit will be considered a rollover super benefit.
A benefit payable to a member suffering temporary incapacity (for example income protection or salary continuance) is not able to be rolled over.
As part of the SFT, the ownership of the insurance policy and the liability to pay the benefit payments would need to be transferred to the successor fund.
If a payment is pending, and the transferring fund holds cash, the payment cannot be transferred as a non-concessional contribution. The transferring fund should process the payment prior to the SFT.
The transfer of the deceased member's interest in the transferring fund can be treated as a rollover of the deceased member's benefit until the beneficiaries are identified, rather than a payment of a death benefit to the beneficiaries (whether they are dependant or not).
Payments will only be death benefits once the beneficiaries are identified. If the beneficiaries are known, then the death benefit should be paid to the individuals or executor of the deceased estate prior to the SFT.
The successor fund must:
- comply with the Superannuation Industry (Supervision) Act 1993 requirement to cash the deceased member’s benefit as soon as practicable
- take the same action that the transferring fund would have taken regarding the deceased member’s interest had the interest remained in the transferring fund.
Lodge an enquiry through the Super Enquiry Service for guidance if any issues arise.
Lump sums – disability modification
In the same way as for member-instigated rollovers, data will need to be transmitted to the successor fund about each member. This enables the disability modification calculation to be done if the member later becomes disabled and requests a superannuation lump sum benefit to be treated as a disability superannuation benefit. This will include:
- the date the member joined the transferring fund
- if a rollover amount was received by the transferring fund with an earlier service period start date for that member, that earlier start date
- for an employer-sponsored fund, when the member’s employment started, if that was before the start of their fund membership.
Where an SFT involves members in receipt of superannuation income streams, the income streams stop in the transferring fund, and new ones start in the successor fund. More information regarding how income streams are impacted by IFTs can be found further below.
Reporting for retirement phase income streams
The reporting requirements for retirement phase events will differ depending on the type of income stream a member receives.
As well as reporting the commutation and the new income stream using the MATS, the relevant closing of the transferred accounts and opening of the new accounts must also occur, using the MAAS.
The transferring fund should report the MCO event simultaneously or before the successor fund reports the new income stream event.
If this does not occur, we will 'double count' the credits in the member's transfer balance account and the member may exceed their transfer balance cap. This may lead to the members' excess transfer balance being sent to determinations.
Report MATS Retirement Phase Event
Report account as closed using the SFT date as status date
Report account as open using the SFT date as status date
Report MATS Retirement Phase event
Superannuation income stream (SIS)
Member commutation (MCO)
Close account via MAAS
Open account via MAAS
Child death benefit income stream (ICB)
Close account via MAAS
Open account via MAAS
Reversionary income stream (IRS)
Close account via MAAS
Open account via MAAS
Reversionary child death benefit income stream (ICR)
Close account via MAAS
Open account via MAAS
Capped defined benefit income stream
Close account via MAAS
Open account via MAAS
If the transferring fund initially reported an income stream event for the member, the transferring fund will report an MCO event upon ceasing the income stream. The date of the MCO event will be the SFT date. The value of the MCO event will be the value of the debit calculated at the SFT date.
The successor fund will report a new income stream event. The date of the new income stream event will be the date it starts in the fund and be the same date as the MCO. The value of the MCO event from the transferring fund and income stream event from the successor fund would be the same unless the income stream is a capped defined benefit income stream.
For reversionary income stream (IRS) and reversionary child death benefit income stream (ICR) the ATO's application of the initial credit to the individual’s transfer balance account will not be impacted by the SFT arrangement, even if the SFT occurs during the 12 months between the date of death of the member and the credit arising in the individual's transfer balance account.
There are no reporting requirements required for retirement phase events when a fund executes an IFT.
If you have changed the account identifiers for an income stream but the income stream itself has never ceased, we expect that you will have completed the associated member account reporting (MAAS Close and MAAS Open) for this change. You will need to be able to identify the correct income stream and action any commutation authority that may contain the previous account details.
SFTs involving capped defined benefit income streams (CDBIS)
If the SFT involves a CDBIS, the transferring fund must report the commutation debit calculated in accordance with subsection 294-145 ITAA 97.
Updated guidance - Market Linked Pensions provides additional guidance for life expectancy and market linked products.
The value of the commutation debit may be less than the value of the credit.
If the member has credits from CDBIS only in their transfer balance account, this will not result in the member having an excess transfer balance.
If the member has credits from a CDBIS and an account-based pension in their transfer balance account, the member may have an excess transfer balance and be sent an excess transfer balance determination.
Reporting for income streams not in retirement phase
Some income streams are not in retirement phase. These are commonly transition to retirement income streams when the member has not met a condition of release with a nil cashing restriction.
As these income streams are not in retirement phase, there is no retirement phase event reporting associated with the income stream stopping in the transferring fund and starting in the receiving fund. Lodge an enquiry through the Super Enquiry Service for guidance if any issues arise.
The trustee of the transferring fund is responsible for ensuring the minimum pension payment requirements are met for each of the pensions payable from the beginning of the current financial year up to the date of the SFT.
If a pension stops being in the retirement phase because the minimum pension payment requirements are not met before the date of the SFT, the transferring fund must report a STO event (income stream stops being in the retirement phase) for the member via MATS Retirement Phase Event reporting.
The date of the STO event will be the stop time. The value of the STO event will be the value at the stop time. The successor fund will report a Superannuation Income Stream (SIS) event. The date of the SIS event will be the SFT date. The value of the SIS event would be the value at the SFT date.
The transferring fund must report the STO event simultaneously or before the successor fund reports the SIS event.
The trustee of the successor fund is responsible for ensuring the minimum pension payment requirements are met for each of the pensions payable from the date of the SFT to the end of the relevant financial year.
An exception to this responsibility is prescribed under section 4 of Schedule 7 to the SISR where the commencement of the new pension is on or after 1 June in the relevant financial year.
The successor fund will need to recalculate the minimum pension payments based on the member account balance at the time of the SFT, or, for an SFT after 1 June, based on the account balance on 1 July the following financial year.
Fund A is undergoing an SFT to Fund B on 1 August 2021. Member One is in receipt of an account-based pension with a minimum pension amount of $10,000 for the 2021–22 financial year.
The number of days from the beginning of the financial year (1 July 2021) to the day the pension is commuted (1 August 2021) is 32. The number of days from the commutation to the end of the financial year (30 June 2022) is 333.
The Fund A Trustee is required to make a pro-rata minimum pension payment of $876.71 ($10,000 × 32 ÷ 365).
The Fund B Trustee is required to make a pro-rata minimum pension payment of $9,123.29 ($10,000 × 333 ÷ 365).End of example
Taxable and tax-free components
Under paragraph 307-125(3)(d) of the ITAA 1997, the new income stream after an SFT will retain the same proportions of taxable and tax-free components as the original income stream.
For super lump sums that did not arise as the result of a commutation of an income stream, the tax-free and taxable components are determined just before the SFT date.
Social security treatment of income streams
Information on the treatment of successor fund transfers for social security purposes can be found on the Guide to Social Security LawExternal Link.
Following a successor fund transfer, income streams are generally reported as a continuation of the original income stream for social security purposes. This may be different than the reporting required for tax purposes.
For information about reporting income streams to Services Australia if a successor fund transfer takes place, refer to Q14 on the Details of income stream product form (SA330External Link) or contact Services Australia through your usual channel.
Reporting notional taxed contributions (NTC)
A transferring fund will need to identify member accounts which are eligible for the grandfathering provisions that apply to a member's NTCs and advise the successor fund. The successor fund will need to ensure the grandfathering indicator is completed in the MAAS for these accounts.
When the member's interest in the transferring fund ceases, the amount reported will be calculated pro-rata based on the SFT date. In addition, if an account was open on 30 June, the transferring fund has an obligation to report an annual MATS balance.
Note: for notional taxed and defined benefit contributions refer to the guidance provided in the annual obligations and balance amounts.
Division 293 tax deferred debt
If a transferring fund has received a notice from the ATO advising that a deferred debt account has been created, they should provide this notice to the successor fund to assist them in complying with their reporting obligations.
The successor fund should provide us with details of members transferred to them with a deferred debt account. The details should include the name of the transferring and successor funds, member name and member account number and client identifier for the member in both the transferring and successor fund.
An end benefit notice does not need to be provided in the case of an SFT. For further details refer to Division 293 tax – deferred debt obligations for funds.
Before the SFT date, the transferring and successor funds and their respective administrators must establish a plan for managing member reporting before, during and after the transition. This includes identifying any limited-service periods where reporting activities will be restricted.
You should establish an agreement regarding the dates each fund will be responsible for any re-reporting, irrespective of the fund who made the error or omission and ensuring business permissions in Access Manager will enable any re-reporting by either fund or administrator.
The transferred members will be left in a difficult position if errors or omissions in reporting are discovered that cannot easily be rectified by re-reporting, and there is no agreement in place between funds to manage these.
The transferring fund's ABN should remain open as long as practicable during and after the transition, to allow the transferring fund or its administrator to correct previous reporting if required.
If it is agreed that the successor fund and its administrator will make corrections to previous reporting, the transferring fund must ensure all appropriate access and permissions have been provided through Access Manager, while the transferring fund's ABN remains active.
To make corrections to previous reporting, the successor fund, or their administrator, must use the same account identifiers initially used to report – that is, the original ABN, USI and member account number combination. If necessary, the successor fund can lodge an enquiry through the Super Enquiry Service to reactivate an ABN, which may be allowed in very limited circumstances.
The funds should also arrange for a data handover to occur to allow the successor fund and its administrator to obtain relevant member information and supporting documents from the transferring fund's administrator and retain access to these records for any corrections to reporting that may arise.
Members who identify an error in reporting should be directed to contact the successor fund to request that the successor fund correct the error.
If the successor fund's administrator does not have enough information to correct the error, the successor fund should first attempt to get that evidence from the member.
For more details refer to Amendments.
The Superannuation Legislation Amendment (Stronger Super) Act 2012 established a framework to implement the data and payment standards that apply to processing rollovers and super contributions.
A transferring fund that pays a rollover super benefit, including a death benefit rollover, to a successor fund must provide the successor fund a statement in the approved form. For further details refer to Taxation Administration Act 1953.
A rollover statement is not required when both funds share a common trustee. An SFT that involves the installation of a single trustee for the merging funds will avoid these reporting obligations.
Another method to transfer information outside of the data standards may be used, which applies only:
- to transfers to a 'successor fund' as defined in the Income Tax Assessment Act 1997
- when both parties agree to use this method and not use the data standards.
When these conditions are not satisfied, the SFT will be treated like any other rollover. Funds should consider the Data and Payment Standard requirements to ensure they sufficiently plan with their administrators and gateway providers to any applicable limitations are applicable.
For example, 2 super funds may already share a common administrator or a common registry platform and so the transfer may simply involve a formal change in the fund to which particular account data is attributed. Alternatively, a merger may only involve a change in ownership of a computing platform on which account records continue to be held.
As with member-instigated rollovers, to ensure sufficient information is provided to allow correct treatment of the rollover benefit, funds will need to refer to the Rollover MIG (PDF, 612KB)This link will download a file and the Death benefit rollover statement.
Funds must provide rollover and contribution certification details of its products using the Fund Validation Service (FVS).
Unique Superannuation Identifier (USI) details
The trustee of the transferring and successor fund will need to provide or update USI details in line with the requirements outlined in the Lodge super product.
As a significant change, the transferring fund should end date its USI through the FVS no less than 28 business days prior to the effective date. It is possible for a successor fund to retain a transferring fund's SPIN format USI. However, an ABN format USI cannot be transferred between funds.
SPINs are administered by APIRExternal Link, an independent, privately owned company, and are subject to APIR rules.
If you are retaining a transferring fund's SPIN format USI, after the transferring fund has end dated the SPIN format USI, the successor fund will need to lodge a new entry through the FVS with that SPIN format USI against the successor fund's ABN effective from the following day. Funds can lodge an enquiry through the Super Enquiry Service if there are any issues in updating the FVS.
If a successor fund has retained a SPIN format USI from a transferring fund and the SPIN format USI will be later decommissioned, member accounts transferred under the SFT will need to be closed and opened again by the successor fund with the successor fund's USI.
The transferring fund should communicate with employers to ensure future contributions are correctly directed to the successor fund. During the transition period, the successor fund may also need to contact any employers who have not yet updated their employees' fund details.
As not all funds will hold employer contact details, communication to members should also include the new payment details to be passed on to their employer.
Funds can also contact clearing houses to inform them of the changes.
Old bank accounts should be kept open during the transition period after the SFT to catch any trailing contributions and to avoid payments being rejected to the employer. Failure to do so can lead to reconciliation issues and disadvantage members.
Errors identified in product details
As with member-instigated rollovers, any significant errors identified by a trustee will need to be immediately rectified – see Errors identified in the FDR.
In general, notices and authorities are only effective in relation to the trustee to which they were provided by the member, or on which a specific fund is named.
If the SFT involves a change of trustee (and possibly even if the trustee remains the same), the validity of the notices and authorities held by the transferring fund in respect to its members will expire and new notices and authorities will need to be issued under the successor fund details.
Some taxation-related notices and authorities are discussed in more detail below; however, this is not an exhaustive list.
Lodge an enquiry through the Super Enquiry Service for any issues about other notices and authorities.
A transferring fund may report a new member account to the ATO and be returned an unmatched message response. We suggest the transferring fund follow through to action a 'Please Resolve' notice. If this is not possible before an SFT, the transferring fund should engage the successor fund to resolve the issue.
A successor fund will not be required to obtain a new TFN declaration for a member who has previously provided this declaration to the transferring fund.
PAYG withholding variation application
A PAYG withholding variation application (both upward and downward variations) made to a transferring fund can continue to apply for the successor fund.
The transferring fund will need to identify members who have made an application and advise the successor fund.
Notice of intent (NOI) to claim or vary a deduction for personal super contributions
The Income Tax Assessment Act 1997:
- Allows for a member to make a contribution to the transferring fund but provide a valid NOI to the successor fund (and receive acknowledgement of receipt of the NOI from a successor fund), even though the contribution was not made to the successor fund.
- Allows for a member to give a variation notice to the successor fund, even though the contribution, valid NOI and acknowledgment came from the transferring fund.
- Transferring funds should ensure they provide details of acknowledged notices of intent to the successor fund. This will enable the successor fund to treat any variations correctly.
- Does not allow the successor fund to acknowledge a notice where an NOI is given to a transferring fund in the few days prior to the SFT occurring and an acknowledgment has not been issued by the transferring fund. Whilst the law requires the transferring fund to acknowledge a valid notice without delay, there may be a limited-service period during which the transferring fund may recommend their members do not give them a NOI.
- If this situation does occur, however, the ATO are willing to accept that the original NOI was effectively not given; the member can give a new NOI to the successor fund and have it acknowledged. The transferring fund should prompt members if a NOI cannot be acknowledged, and the member should submit a new NOI to the successor fund. For further information refer to NOI to claim a deduction.
Risk only accounts
Where a member's interest in the successor fund is a risk only account with no investment component (zero balance), a member can provide a NOI to the successor fund in respect of contributions made to the transferring fund.
The successor fund will not know if members made any contributions (before the SFT) in the same or previous financial year.
They will therefore require personal contribution data as well as details of the NOI process already completed (if any) at the time of SFT.
This enables the successor fund to determine what the member is entitled to claim or correct. This information is to be passed from the transferring fund to the successor fund in an SFT.
A member can generally lodge an application with their super fund to split their contributions (if the fund allows it) in the:
- financial year immediately after the financial year in which the contributions were made
- financial year the contributions were made – only if their entire benefit is being withdrawn before the end of that financial year as a rollover, transfer, lump sum benefit or combination of these.
However, contributions can only be split by the trustee of the fund to whom the contributions were made. Once the SFT has occurred, the member has lost their opportunity to split their contribution with their spouse.
As part of the notification sent to members by the transferring fund about an impending SFT, a reminder about contributions splitting should be included.
Members will be prompted to give the trustee of the transferring fund a notice of intent (NOI) to split before the SFT, and the trustee will undertake the split as part of the SFT process.
This notice must be given to the trustee of the transferring fund before, or at the same time as, lodging a contributions splitting application. For further guidance refer to Contributions splitting for members.
In an SFT where account freezing notices are current, the transferring trustee may need to await the outcome of the freezing notice, subject to any legal advice obtained by the trustee in relation to this issue.
Binding death benefit nominations (BDBNs)
All BDBNs attached to member accounts will need to be reviewed by both the transferring and successor fund to determine their validity and currency (most have a 3-year validity) before and after the SFT.
If a member is a member of both the transferring fund and the successor fund, a new BDBN may need to be completed with the successor fund, dealing with both interests.
Family law agreement, court order or consent order to split superannuation
The transferring fund should inform the successor fund of any member’s account which is subject to an agreement or order to split super which has not been completed. It should also inform the successor fund of any un-actioned applications by ‘an eligible person’ for information about the super interest of a member.
For defined benefit funds, Regulation 29 of the Family Law (Superannuation) Regulations 2001External Link applies to determine the gross value of defined benefit super interests for these purposes.
The transferring fund should notify members via the Significant Event Notice to avoid electing release from the transferring fund, due to the impending SFT. However, there are situations where timing issues or client need will require release prior to the SFT.
The ATO is unable to suppress the issue of a Release Authority (RA) for time critical elections, such as the First Home Super Saver Scheme. Members can be significantly disadvantaged if elections are not processed promptly.
Funds must provide a valid response to all RAs, including where the due date is during the limited-service period via the correct channel if they are unable to action the RA, as per the Rollover User Guide (PDF,880KB).This link will download a file We recommended that current and future due dated RAs are actioned prior to the SFT date where practicable, as a new release authority will not be issued to the successor fund while the original notice is still outstanding.
Note: all RAs must be responded to via the same channel by which they were issued.
Funds should lodge an enquiry via the Super Enquiry Service for advice on the management of RAs during an SFT.
Commissioner's commutation authorities (CCA)
If a CCA is received by the transferring fund after the account has been closed, the transferring fund would need to report a CC2 event (in part), value = 0.00 and account status = Closed via the Transfer Balance Account Report (TBAR).
We will then re-assess the member and take the next appropriate action. If the member is still in excess, then a CCA may be issued to the successor fund.
If the account has undergone an IFT, then it is expected that you will be able to identify the correct income stream and action any commutation authority that may contain the previous account details.
Betty starts an income stream, and the fund uses the member account number of 00012345. After a registry system migration, the fund changes the account number for Betty's income stream to ABC123.
- receives a commutation authority for Betty's account 00012345 and has put systems in place to recognise that account 00012345 is now account ABC123.
- can comply with the commutation authority in full, as the income stream has not stopped or changed, and commutes the required amount from income stream ABC123 by the due date.
- does not report an MCO for MATS, it lodges a TBAR reporting a CC1 and uses account number 00012345 to match the commutation authority and avoid further ATO contact questioning the account number.
- notifies Betty using whichever account number will be most meaningful for her.
Note: If your systems do not allow you to report the TBAR with the legacy account number, we understand that you will need to use the new member account number. Keep in mind that we may need to make further contact with you to clarify what has occurred in these instances.
Fund income tax will impact upon member balances. Therefore, funds that are contemplating an SFT have an obligation to consider the tax impacts.
Lodge an enquiry through the Super Enquiry Service for assistance with SFT issues (where your enquiry relates to fund income tax issues, it will be referred to the appropriate area in the ATO).
No-TFN contributions income tax offset
The no-TFN tax offset is the total amount of the tax payable on amounts of no-TFN contributions for which the following conditions have been met.
For the 2020-21 income year and later income years, a successor fund is entitled to claim the no-TFN tax offset if both the following conditions are met:
- tax was payable by the previous fund on an amount of no-TFN contributions in any of the previous 3 income years or relevant part year for the year in which the SFT occurred
- the no-TFN contributions were made to the previous fund to provide superannuation benefits for an individual who has never quoted (for superannuation purposes) their TFN to the previous fund but has quoted their TFN to the successor fund for the first time in the current income year.
To allow the successor fund to accurately claim the no-TFN tax offset it is suggested that the transferring fund provides enough details of previous no-TFN contributions from the previous 3 income years prior to the SFT and the year in which the SFT occurs.
Division 310 – loss relief for merging superannuation funds
From 1 July 2020 the temporary tax relief for merging superannuation funds was made permanent. Since December 2008, tax relief under Division 310 of the Income Tax Assessment Act 1997 has been available for merging complying superannuation funds to transfer revenue and capital losses, and to defer taxation consequences on gains and losses from revenue and capital assets, subject to funds meeting certain conditions.
How to obtain certainty that Division 310 requirements are met
To obtain certainty that the Division 310 requirements have been met, you could seek a private binding ruling from the ATO's early engagement for advice service. We recommend you email PGIAdvice@ato.gov.au as soon as practicable after the decision to undertake the SFT is made to ensure we are in a position to provide advice well in advance of the SFT date.
As the transferring fund:
- notify members of SFT
- establish plan with successor fund to determine the dates each fund will be responsible for making amendments and identify any reporting for limited-service periods
- notify administrators, gateway operators, clearing houses and other service providers as they may be able to assist in facilitating the implementation of the transfer
- arrange for data handover to successor fund of all relevant member information and supporting documents required to make amendments
- inform employers of new contributions payment details
- ensure all ATO Statements of Accounts are reconciled
- finalise reporting of member transactions/contributions up to the SFT date
- provide successor fund all information on lost members
- action any outstanding section 20C notices (unless there is a pending claim)
- process pending disability and death benefits, or instruct the member/beneficiary to remove any certified Terminal Medical Condition benefit
- provide data to successor fund for disability modification calculation
- close old member accounts via MAAS and advise successor fund once completed
- provide rollover statement to successor fund (if required)
- keep old bank accounts to catch trailing contributions
- end date USI 28 days prior to effective date Refer to the Fund Validation Service user guide
- develop a strategy for how messages received post SFT date will be handled prior to USI end date to avoid failed messages or refunds. An old USI may remain on the FVS after the SFT date, with a NIL certification, to resolve outstanding matters.
- report relevant event type upon ceasing pension with date and value at SFT date
- ensure minimum pension payments are met from start of income year to SFT date
- provide reminder to members on outstanding notices/authorities and/or provide to successor fund (if relevant)
- provide successor fund any ATO notice of Division 293 Deferred Debt account and other relevant items such as No TFN Tax and Notice of Intent to claim Personal Super Contribution Deductions.
As the successor fund, you:
- establish plan with transferring fund to determine the dates each fund will be responsible for making amendments and identify any reporting for limited-service periods
- arrange for data handover from transferring fund of all relevant member information and supporting documents required to make amendments
- open new member accounts via MAAS shortly after transferring fund has closed old accounts
- update member lost status based on information received from transferring fund
- report SIS event upon commencing new pension with date and value at SFT date
- ensure minimum pension payments are made from SFT date to end of income year
- action any notices/authorities (where appropriate) provided by members/transferring fund.
If you have undertaken an SFT that results in a new ABN, you may need to consider whether you will still be able to:
- access online services for business (ATO) and other government portals
- utilise ATO Standard business reporting (SBR) superannuation services e.g. MAAS and MATS.
- Claiming your business
- You will need to have a principal authority claim the new business in Relationship Authorisation Manager (RAM).
- Who is the Principal AuthorityExternal Link?
- Relationship Authorisation Manager (RAM)External Link
- Setting up for Government portals – e.g. online services for business (ATO) and APRA Connect
For government portals, authorisations will need to be made at an individual employee level. For example, if you use an administrator, you will not be able to appoint that administrator at an ABN level. You will need to know the contact details of each of the administrator’s employees and then appoint each employee through RAM.
The same applies for employees working directly for you.
- Set up authorisationsExternal Link
Individuals will also need to have a current myGovID at the appropriate identity strength for relevant services.
If you are a using an administrator and or other service provider, you may need to make an ABN level appointment in Access Manager for the services you require. Find out more about services and support for APRA Regulated funds.
Access Manager appointments navigation instructions:
- Log into Access Manager
- Under ‘Business appointments’
- Select ‘Who has access to my business’
- Select ‘Appoint a new business’ then add the digital service provider ABN.
To notify us of your hosted SBR software services:
- Select ‘My hosted SBR software services’
- Select ‘Notify the ATO of your hosted service’
- Search for a hosted SBR software service provider in the list, or search by typing the ABN or name
- Select the ABN link of a hosted SBR software service provider
- Enter the Software ID provided to you by your digital service provider and select Next
- Read the Notification statement then select Save
- A success message will appear on the next screen to confirm your notification.
Refer to my hosted SBR software services if you are managing Standard Business Reporting (SBR)-enabled software directly as you will need to:
- create a new machine credential through RAMExternal Link – then
- setup the appropriate appointments in Access Manager.