Lost member accounts for super funds

What is a lost member account

A member of a super fund's account is lost if:

• they're uncontactable
• they're an inactive member
• they joined the fund from another fund as a lost member.

For more information, refer to Lost members register protocol.

General principles for held unclaimed super

The unclaimed super money (USM) held for the lost member remains with you. That is unless it meets the definition of a lost member account (small accounts and insoluble lost member) at the end of an unclaimed money day. You must provide the ATO with a statement and make a payment by the scheduled statement day.

When a member is defined as lost, you have no further obligation to contact or locate them.

Small lost member account

You must report and pay to the ATO amounts that meet the following definition of lost member account – small account.

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 doesn't 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.

The balance at this time should not reflect any amounts yet to be credited or debited from the account. You're not required to add interest or deduct fees to determine whether the account is a lost member account.

You must provide information relating to the account to the ATO on the scheduled statement day.

 

 

 

Insoluble lost member (inactive) account

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.

An account is also 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're satisfied it will not be possible, considering the information reasonably available, to pay an amount to the member.
• The account doesn't support or relate to a defined benefit interest.

At the end of an unclaimed money day, you must identify any accounts belonging to lost members (as defined by the relevant regulations), and who meet the definition of an insoluble lost member (inactive account of unidentifiable member).

Examples of amounts that are received in respect of the member include:

• contributions, such as employer or personal contributions
• rollovers
• transfers.

Amounts received in respect of the member do not include interest or earnings that may be credited to the account by you.

Assessment of an insoluble lost member account

Considering the information reasonably available, you must be satisfied that you would never be able to pay an amount to the member because you could not be confident of verifying ownership. For example, if you had a name and a default date of birth it may not be sufficient for you to establish the member’s ownership of the account.

The decision is to be made based on any information reasonably available to you, but it is expected you will, if you have not already done so, follow up any information that could be made available to you at this time.

This allows you to make a reasonable assessment of whether the amount will meet the definition of an insoluble lost member account.

For example, if an account would potentially meet the definition of an insoluble lost member account, but you believe you may be able to get further identity information about the member from the employer who contributed on their behalf, it would be expected that you contact (or attempt to contact) the employer.

The decision as to whether the member meets the insoluble lost member account test is to be made on information reasonably available at that time – not on information that may become available in the future.

The term 'reasonable' is not defined within the legislation and must be determined in the context of the information held by you in a particular circumstance.

As a general guide, you must hold a minimum of 2 complete pieces of quality information about the member to enable you to determine and verify the identity of the person whose account you hold.

Even if you hold 2 or more complete pieces of information, you should still assess this information in terms of quality and whether it would truly allow you to correctly establish the identity of the account’s owner.

Ultimately, the decision about whether you hold sufficient information to determine the account ownership is up to each individual fund.

Amount to be paid for lost members

If an account is identified as a lost member account on an unclaimed money day, you must make the payment of the account to the ATO by the corresponding scheduled statement day where both of the following apply:

• the account is still held by you on behalf of the person
• the person is still a lost member at the earlier of
  • the calculation time
  • the time payment is made (if an amount is payable)
  • the time the payment is due and payable.

Accounts subject to family law payment splits

If a lost member account that must be paid to the ATO is subject to a payment split in which the non-member spouse is, or could be entitled to be, paid an amount, then work out the amount paid as follows:

1. Work out the member's account balance at the payment date.
2. For the lost member, only take into account their entitlement to payment after any reduction by the payment split.
3. For the lost member, work out the amount that would normally be rolled over or transferred if this had been requested by the member (as set out above).