Payday Super
In late 2023, stakeholder workshops were held post the release of the Treasury consultation paper and focused on:
- how industry can deal with timeliness and volume of transactions
- how we could improve our digital communication channels and be mindful of data quality
- are there opportunities to support employers when payments are not received by the superfund
- the ATO’s ability to review information from employers and funds
- what are the impacts for digital service providers.
The ATO is formulating options to provide to government within the next month, for decisions to be made relevant to the 2024–25 Federal budget. Following the budget and once policy parameters are defined, stakeholders will be engaged in the process.
We are looking to form a Special Purpose Working Group (SPWG) specifically for Payday Super. It will provide overarching advice on end-to-end administrative solutions. Membership and how the group will be formulated is dependent on final policy parameters. We will update stakeholders through stewardship and stakeholder relationship groups.
Questions and group discussion
Can any information be shared prior to the budget announcement?
The ATO will share relevant information as soon as practicable after the budget. The Payday Super SPWG will be a key forum for information sharing.
Reversioning of SuperStream
Before committing resources and funds, government policy direction is needed. We understand this is a major issue for the stakeholder group, as such any feedback on irritants and issues from industry is welcomed.
Employer group feedback
The ATO advised that other stewardship groups have provided feedback on this matter. The main themes are:
- resolution of system complexity
- the Superannuation Guarantee Charge (SGC) is inflexible within the current system
- employers need earlier advice if an SG payment has not been made
- increased costs and administrative requirements in meeting obligations.
First Home Super Saver Scheme
Key points discussed included:
- First Home Super Saver Scheme (FHSS) technical amendments are being progressed with updates to ATO systems and ATO Online, to support the measures new functionality.
- The process of returning FHSS amounts to super funds will be managed outside SuperStream.
- The varying or revocation of Release Authorities will not disrupt SuperStream interactions between the ATO and super funds.
- The technical changes have a current start date of 20 September but there is a provision to commence law by proclamation which may move the date forward a few days. This will be confirmed later this year.
- Project team continues with system builds that is impacting the individual experience.
- Guidance notes are also being developed to assist stakeholders.
- The ATO has been working with ASP regarding the return of monies process and are developing material to assist.
Member comments
Industry is looking forward to the end solution, and a facts and questions support document with definitive detail would be welcomed. This would help alleviate questions from industry stakeholders.
Is a timeline available for when support material will be published on ATO Online, as relevant information will be required to be disseminated to all funds so procedures and processes can be updated?
The ATO advised that systems are currently being built with testing continuing into the next couple of months. Support materials will be distributed for initial feedback. We are aware that the broader fund audience, and just not this group need to be advised and engaged.
Post meeting comment – Proclamation has been given and the measure will commence from 15 September 2024. Refer to Federal Register of Legislation Treasury Laws Amendment (2023 Measures No. 3) Commencement Proclamation 2024External Link
Better Targeted Super Concessions
Key points discussed included:
- Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023, and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023 were introduced to Parliament on 30 November 2023.
- On 7 December 2023 they were referred to the Senate Economics Legislation Committee for inquiry, with a report due 10 May 2024.
- The closing date for submissions to this inquiry was 23 February 2024.
- Draft regulations for this measure have been released with a consultation period of 15 March to 26 April 2024.
- We have been working with stakeholders to determine the priority issues and identify where public advice and guidance is needed to assist industry to understand and implement the new law.
- We are also considering the administrative options for this measure, and a communications strategy is being formulated.
- Consultation with key external stakeholders will be facilitated by the formation of a SPWG once policy parameters are finalised.
Member comments
Regarding Total Super Balance (TSB) – if the measure changes the valuation methodology, there could be significant code changes required for non-account-based pension products.
Noting that there is a lot of focus on draft law and regulations at this stage, the ATO will continue to engage with industry on further details.
Super access for victims and survivors of child sexual abuse
Key points discussed included:
- The government will allow victims and survivors of child sexual abuse to seek access, via a court order, to additional personal or salary sacrifice superannuation contributions made by the offender.
- No start date has been announced however, it is expected to commence late 2025 and will be confirmed once law progresses.
- Victims will subsequently be able to seek an order from the Federal Circuit and Family Court of Australia to access any additional super contributions made by the offender.
- A victim can then apply to the ATO to request the court order-directed amount to be paid from the offender’s relevant super account.
Member comments
We are looking to implement a low-cost solution for stakeholders via a release authority.
Projected numbers who will utilise this measure are low.
Victims’ confidentiality is a concern.
The ATO is working closely with the courts and waiting for legislation.
Industry will be consulted on the visibility and payment process over time as the law is developed and the project progresses.
Cook Islands superannuation portability
Key points discussed included:
- The Australian Government will support a reciprocal superannuation portability arrangement with the Cook Islands. This will enable the transfer of superannuation from Australian superannuation funds to the Cook Islands National Superannuation Fund (CINSF), commencing 1 July 2025.
- This measure would see the development of a separate bilateral agreement to expand Australia’s current bilateral Trans-Tasman superannuation portability arrangement.
- It will allow the portability of retirement savings between an Australian complying superannuation fund and the CINSF.
- The projected numbers utilising this measure are assumed to be small.
- Many of the parameters are currently unknown until draft law is received and the bilateral agreement is produced.
Member comments
Industry agreed this measure will have a large impact for funds, with relatively low volumes expected.
Department of Foreign Affairs and Trade and Treasury are working closely with the Cook Islands Government.
There are similarities between this measure and the Kiwi Saver product.
The Intent of the measure is to keep relevant monies within the super system.
Transfer balance cap changes for individuals impacted by SFT
Key points discussed included:
- The intent of this measure is to ensure individuals with a capped defined benefit income stream will not be adversely impacted by mergers or successor fund transfers (SFT). This can occur when the transferring fund and the successor fund have calculated different values for the same income stream.
- Retrospective application – back to 1 July 2017.
- Law is currently being developed to give effect to the measure, and we are anticipating a public consultation period will commence when practical.
Member comments
Initial industry feedback is that the retrospectivity of the measure may cause funds challenges.
At present, the ATO can only advise to proceed with SFT reporting based on the current law.
After public consultation, we will provide whatever guidance we can to assist funds.
Engagement and Assurance campaign
The ATO Engagement and Assurance focus for the next three months will include SuperMatch annual statement of compliance obligations, and data integrity issues.
Funds are reminded that their SuperMatch annual statement of compliance was due by 28 February 2024. We will contact funds that haven’t met this requirement.
Funds who do not provide their statement of compliance by the due date may have their access to SuperMatch switched off.
We are seeing unlinked Member Account Transaction Service (MATS) causing transactions not being linked to a member, and Member Account Attribute Service (MAAS) status date issues causing closed accounts to incorrectly display as open.
Funds should ensure they follow the MATS Business Implementation Guide (BIG) to prevent issues with unlinked MATS, and the MAAS BIG to ensure accuracy around status dates.
We will continue to work with identified funds throughout the coming months to obtain insights into the reasons for these reporting issues. Where appropriate we will be looking to understand what mitigating actions funds will adopt to prevent future data integrity issues.
Strategies to improve data quality
Key points discussed included:
- The ATO is focused on improving superannuation fund member reporting. This information is essential to the operation of the superannuation system.
- The data is used by over 20 ATO products, such as correctly calculating an individual’s contributions caps, employer superannuation guarantee compliance, and the display of member information to ATO Online.
- Quality data has always been essential to the operation of the superannuation system. It is as true as ever with an increasing real time reliance on data, to give effect to new and better ways of managing super grantee compliance as we move towards Payday Super.
- To build on the good work to date and to achieve continued improvement as we mature the superannuation system, we will be working with the superannuation industry over the next 6 to 12 months on improving the timeliness, completeness, and accuracy of the data reported to and held by the ATO.
Our work will focus on:
- increasing the profile and understanding of the importance of quality reporting for member outcomes via
- Profile - member reporting governance focus through the ATO’s Top 1,000 Combined Assurance Review (CAR) Process
- Education - industry education on how data is used and consumed in ATO systems and administration
- Compliance - principles and strategy.
- Addressing known data quality issues to improve the quality of data holdings through
- Triage and analysis - identifying issues that need to be addressed now, and working internally and with industry to establish processes to deal with known quality issues
- Campaigns - increasing the level of direct engagement through campaign work to improve reporting performance for some funds
- Policy/law - influencing changes and legislative requirements or reporting standards to assist in addressing data quality issues.
Member comments
The ATO will soon host a Webinar:
- to examine the impacts and opportunities that will flow to individuals
- on how ATO systems will consume and utilise the increased data flows
- to examine the supply chain of how data gets sent to us
- with a focus on dates, integrity of data reporting and system solutions.
The Public Groups CAR program is continuing with approximately half the fund population within the Public Groups Top 1,000 population having been engaged in the program.
The ATO is preparing information about our compliance strategy which will be discussed at the next meeting.
Fraud and Security
Key points discussed included:
- The ATO has seen an increase in attempted impersonation fraud, particularly involving individuals who have met or are approaching preservation age. This is where a fraudster attempts to update key contact information through webchat or over the phone with the intent of taking over the members online account, leading to unauthorised benefit claims or account rollovers to another fund.
- We strongly encourage funds to ensure they have processes in place to identify high risk transactions and have additional controls in place at least for those transactions.
- Key controls identified by the Fraud and Security Working group include Know-Your-Client and Multi-Factor Authentication.
- The ATO recommends ongoing vigilance and monitoring of online activity accounts for automated or bot-like activity. Refer to SuperMatch Alert 39/2023.
Member comments
Fraud and security will continue to be a topic of interest for the Superannuation Administration Group membership. Feedback received was that it is important to hear industry trends, discuss shared experiences across the ATO and industry, and what is occurring at an aggregate level.
The changing of member details using webchat has been identified as a risk. Funds were reminded they are best placed to implement appropriate controls and risk mitigation strategies. The SAG is an appropriate forum for members to share insights and information pertaining to this topic and other high-risk fraud and security matters.
Fund administration
Successor and intra fund transfers data quality
During 2023 we supported funds and administrators through 34 SFT / Intra fund transfers.
Insights gained highlighted some common issues across industry, mostly relating to data quality post-SFT. For example, there are a significant amount of open member accounts still in the system.
Two key reasons identified for ineffective closures are:
- Incorrect account status date reporting - is where funds are reporting the closed MAAS with the account status date field earlier than a previous MAAS. ATO systems will not consume the date and the account remains open.
- Incorrect time stamp - is where a fund submits a MAAS to close the account and the timestamp is prior to a previous timestamp. ATO systems will not process the MAAS as our system will not accept it as the latest update of the member account.
Where possible, we’ll be working with affected funds to remediate open accounts. However, there is further work to do on the approach to take where an Australian Business Number (ABN) has subsequently been cancelled post-SFT.
Fund communications
The refreshed ato.gov.au website is live and features a refreshed design, enhanced search functionality and streamlined navigation for a more user-friendly experience.
Content, tools, and calculators on the new website remain unchanged, and redirects have been implemented to ensure that the existing links are intact.
Section 20c notices
Twice a year Super CRT alerts are issued to funds notifying when the ATO will commence issuing s20C notices.
In future, the ATO will no longer utilise this channel and will notify funds through our Super fund newsroom.
The subscriber list for Super News provides coverage for approximately 10,000 subscribers.
Bulk stapling service decommissioning
The bulk request stapling service for employers will no longer be decommissioned in March 2024 but may be decommissioned in the future.
All impacted digital service providers have been contacted individually and ato.gov content was updated in early February, advising the service is continuing.
News articles
News articles have been published across various sectors including:
- Tax professionals’ news
- Business bulletins
- Digital service providers news
- Super news and SMSF news.
Member comments
- ABN cancellations
- Industry feedback was to preference keeping an ABN live. For example, closing an ABN for GST/Tax purposes but keeping the ABN live for member reporting. We will look at amending the SFT protocol, with industry assistance and input. We will consider this feedback as we work through the best approach to manage reporting post SFT.
- SFT discussion
- Limited service period issues and ineffective closures. We will review and update our guidance where appropriate.
- Feedback from industry will help inform education content such as news articles, guidance, and direct messaging about getting it right. There are no planned updates to the SFT protocol at this point, specifically relating to this work.
Client Account Services
From 1 January 2024, there have been 586 enquiries received via the Super Enquiry Service.
Three key topics were:
- Suspended Payments and Failed validations – ensuring the data message and payment are sent as per data and payment standards. Timeframes are critical in resolving issues for suspended payments. We ask that responses are provided within the relevant timeframes to allow us to rectify these as quickly as possible.
- Reconciliations – proactive reconciliations by funds are key, especially prior to SFTs. This includes reconciliations for ATO accounts. Where there is a SFT occurring, funds are to notify the ATO in advance and ensure there is a contact for the fund.
- Incorrect/duplicate payments – being mindful when making payments for SuperStream (including release authorities) as any duplicate and/or incorrect payments trigger refund requests, this causes significant reverse workflow.
APRA fund client experience survey
The ATO is launching the annual Australian Prudential Regulation Authority (APRA) fund client experience survey on Monday 29 April 2024, key points are:
- The survey will run for 2 weeks and close Friday 10 May 2024.
- It is estimated to take approximately 10 minutes to complete.
- The survey is open to anyone working within the large super fund industry.
The survey is designed to:
- gather feedback on how effectively the ATO and the super fund industry are working together to administer the super system
- help us understand how we can improve our services and engagement with industry.
A Super news article will also issue to support this initiative and stakeholders are encouraged to share the survey with industry colleagues.