Managing member accounts for super fund transfers

Updating member account transactions

Before closing member accounts, the transferring super 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 of Taxation may allow, of allocation to a member's account.

These requirements are outlined in the Member Account Transaction Service (MATS) Business implementation guide which can be found by visiting Superannuation (SPR) | Standard Business Reporting (sbr.gov.au)External Link and accessing ATO SPRMBRACCTX.00001 2018 Business Implementation Guide (DOCX) document.

Reconciliation of accounts

Funds must ensure that their accounts for which they have a superannuation role are fully reconciled as part of closure activities. This includes ATO super, fund Unique superannuation identifier (USI) and unclaimed super money (USM) accounts.

Funds can access Online services for business to support requisite activities, such as checking super balances (including credit balances) and resolving all outstanding balances. This includes confirming that 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, lodge an enquiry through our Super Enquiry Service.

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 enables:

• payments to still be made to the ATO
• credits to be issued back to the fund
• enables the receipt of trailing contributions made by employers.

Contributions received by the transferring fund after the SFT has taken place cannot be accepted. This does not apply to IFTs as the member still holds an interest in the fund.

See more information about processing employer contributions at Limited-service period for super fund transfers.

Reporting account balances

In the interests of enhancing the member experience, the successor fund may choose to report the opening balance of an account. This is 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 in ATO online services until the legislated 30 June balance is reported (due by 31 October). In some cases this 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. 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.

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, refer to Reporting account balances in our Annual obligations and balance amounts protocol.

Updating member account attributes

As with member-instigated rollovers, funds undergoing an SFT or an IFT will have a requirement to report open or closed accounts and account changes, as outlined in our:

• Member Account Attribute Service (MAAS) Business implementation guide which can be downloaded by visiting Superannuation (SPR) | Standard Business Reporting (sbr.gov.au)External Link and accessing ATO SPRMBRINFO.0001 2018 Business Implementation Guide (DOCX) document.
• 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 in our Annual obligations and balance amounts protocol.

Reporting closed accounts

The transferring fund should close member accounts via Member Account Attribute Service (MAAS) reporting before the successor fund opens new member accounts. This reduces the risk that members will see old account information in 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, refer to Reporting closed accounts in our Member account reporting and validation protocol.

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 in 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 us for a deferral of their MAAS reporting obligations through our Super Enquiry Service.

For more details, refer to Reporting open accounts in our Member account reporting and validation protocol.

If you are not going to meet the legislative reporting timeframes, refer to Requesting a deferral for your member reporting obligations.

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 through our Super Enquiry Service using the deferral form Requesting a deferral of your member reporting obligations.

Transfer of pending payments

Terminal medical condition

Problems may arise in an SFT where members have provided their fund with a terminal medical condition (TMC) certification. Where they have 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. This 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 Application – excess contributions determination to disregard the contribution due to their 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 section 995-1 of the ITAA 1997.

Where a disability superannuation benefit is pending and an SFT is due to occur, the transferring fund can roll over the disability superannuation benefit to the successor fund. The benefit will be considered a rollover super benefit.

Temporary incapacity

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.

Death benefits

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 our 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.

Details must 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.

Re-reporting obligations

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. Ensure that 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. 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. This will 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, they must use the original ABN, USI and member account number combination for any corrections.

Information transfer for data handover

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
• retain access to member 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 information about amending transactions, balances and events, refer to Amendments.