Where your members are in excess of the transfer balance cap and we have issued them with excess transfer balance determinations, they must commute the whole amount, including any cents. You are required to report the full amount of the commutation (including cents) to us as a member commutation.
Your member can use the excess transfer balance election form to allow us to issue a commutation authority to a different super income stream account or provider to the one identified in the excess transfer balance determination. Your member has 60 days from the issue date of their excess transfer balance determination to make an election.
Note: Once an election has been made it is irrevocable. That is, your member will not be able to withdraw or amend their election.
Where your member makes contact with you, it will help them if you explain that they can voluntarily commute from their income streams rather than waiting for us to send a commutation authority.
Acting quickly to voluntarily rectify the excess will reduce the amount of excess transfer balance tax your members will have to pay.
If a member commutes during the determination period and you have not reported this to us by the required date, a commutation authority will issue to the fund listed in the member's default commutation notice. If we later receive the reporting before the commutation due date and you have not taken any action in response to that commutation notice we may revoke the commutation authority. Where something like this occurs, we would expect you or the member to contact us.
Where the member does not voluntarily commute the excess, or the amount commuted is less than the required amount on the determination, then we will issue a commutation authority to the provider, including any cents that may be remaining.
Example 19: Member calls the fund
Joan from example 15 doesn’t act alone; instead, she calls the fund to advise that an ETB determination has been issued by the ATO and she seeks confirmation from the fund about the amount they reported and the process to meet obligations. The fund obtains from Joan the due date of the determination and advises her that if they action a member commutation now, it won’t be completely processed and reported to us before the required date on her determination. The fund advises Joan to call us and seek an extension of time for 30 days then to complete a request to commute with the fund, ensuring the full amount on the determination is covered by the request (including cents, or rounded up to nearest dollar). Once the fund receives the request, it actions the commutation and reports an MCO for Joan.
End of example