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James O‘Halloran/Peter O’Reilly APRA-regulated Funds – A regulator’s perspective

© James O’Halloran/Peter O’Reilly August 2016 1

NATIONAL

SUPERANNUATION

CONFERENCE Session 2A

ATO Presentation:

APRA-regulated Funds – A regulator’s

perspective

Presented by:

James O’Halloran,

Deputy Commissioner,

Superannuation

And

Peter O’Reilly

Assistant Commissioner

Public Groups &

International

Australian Tax Office

Date: 25 August 2016

National Division

25-26 August 2016

Crown Conference Centre, Melbourne



CONTENTS

1 Introduction ............................................................................................................................. 4

2 Strategic Partnerships and Approach ...................................................................................... 5

3 Superannuation focus areas and updates ............................................................................... 9

3.1 SuperStream ....................................................................................................................... 9

3.2 Commencement of Government to Business Transactions ................................................... 10

3.3 SuperTICK ........................................................................................................................ 11

3.4 Fund Validation Service (FVS) ............................................................................................ 12

3.5 Diagnostics reports and voluntary disclosures ...................................................................... 13

3.6 Fund Mergers .................................................................................................................... 15

3.7 Recent technical issues and irritants ................................................................................... 16

4 Income tax approach and focus areas ................................................................................... 18

4.1 Governance and quality assurance for third-party data ......................................................... 20

4.2 Foreign Income Tax Offset (FITO)....................................................................................... 20

4.3 Exempt current pension income (ECPI) ............................................................................... 22

4.4 Post-tax reporting .............................................................................................................. 22

4.5 Expenses .......................................................................................................................... 23

4.5.1 Update on TR 93/17 .................................................................................................... 23

4.5.2 Fund Mergers .............................................................................................................. 24

4.5.3 Administrators ............................................................................................................. 24

4.5.4 Death and Disability Insurance Premiums ..................................................................... 25

4.6 Imputation ......................................................................................................................... 25

4.7 International ...................................................................................................................... 26

4.8 Capital Gains ..................................................................................................................... 27

4.9 PAYGI deferral .................................................................................................................. 29

4.10 Isolated and/or significant transactions .............................................................................. 29

5 Looking Ahead ................................................................................................................... 30

5.1 Superannuation reforms ..................................................................................................... 30



5.2 Productivity Commission review.......................................................................................... 32

5.3 Super & Tax Gap Estimates ............................................................................................... 32

5.4 Super Services Dashboard ................................................................................................. 35

5.5 New reporting to government framework ............................................................................. 36

5.6 Working with tax professionals ............................................................................................ 37

6 Conclusion............................................................................................................................. 38



1 Introduction

I’m delighted to be here today at the National Superannuation

Conference. It is a good opportunity to share with you our observations

and shared challenges ahead.

Today’s presentation outlines our perspective on the environment for

large APRA-regulated superannuation funds, with a focus on current and

emerging super and income tax issues.



2 Strategic Partnerships and Approach

To achieve a world-class superannuation system, we recognise the

importance of developing strategic partnerships and alliances with key

stakeholders in the industry.

As large funds have over $1.3 trillion invested in about 28 million

superannuation accounts, the ATO recognises the importance of strong

partnerships with both APRA as a regulatory body and APRA-regulated

funds and of course forums where industry comes together like today. I

therefore would like to thank The Tax Institute for hosting this

conference today.

Through these partnerships we have developed a ‘guiding coalition of

change’ to work together and in complimentary ways, to have a

superannuation system which Australians can have confidence in and

one which is healthy and prosperous.

One clear example of an effective ‘coalition’ is the successful

implementation of SuperStream which has ‘reformed’ the industry within

a short period of time.



Indeed, initial industry analysis suggests that savings in the order of $1

billion per year will be achieved in efficiency gains from its

implementation, or alternatively, each rollover transaction estimated to

save $40-65 equating to $100 million per annum.

What is therefore evident is that the partnership with large funds has

significantly evolved from traditional audit and risk review activities to

advice, education and guidance, service and assistance, and knowledge

exchange. In essence, you could say that the superannuation industry is

an ‘ecosystem’ comprised of diverse and dynamic partnerships which

can make a difference.

In 2015 we introduced tailored diagnostic reports to 261 large funds,

followed-up this year by an enhanced report based on industry

feedback. The report details information across 13 performance areas.

Each fund is given an overall risk categorisation on the consequence

and likelihood of compliance reporting. The consequence rating is based

on the fund's relative ranking on several key indicators, such as member

numbers, contribution values, and the number and value of lost

accounts. The likelihood rating is based on performance against a series

of benchmarks against their obligations.



The success of a more general move to sharing our data with funds is

complemented by an early engagement approach.

In this second year of the ATO’s release of these Diagnostic Reports to

the large funds we found:

no high risk funds compared to two last year

55 per cent of funds had improved their overall ranking compared to

last year

we now have 18 key clients compared to 14 last year, and two

medium risk funds compared to 8t last year

the performance of 10 funds improved while 6 funds declined

significant improvement in TFN quality reporting mainly around

non-individual TFN reporting, which has reduced by 25 per cent, and

‘Correct TFN’ has increased by 7 per cent.

As part of this engagement we also undertook 17 key client visits, with

feedback overwhelmingly positive about the report’s benefits.

I believe that the ATO Large Fund Diagnostic reports and voluntary

disclosure processes highlight the importance of a partnership approach

and the benefits in sharing data with you to promote early engagement

and finding ways to problem solve.



If you could sum-up this broad approach in a few words it would be

'Prevention before Correction'.



3 Superannuation focus areas and updates

3.1 SuperStream

More specifically, we are extremely pleased with the benefits that

SuperStream has delivered to so many stakeholders, such as the ability

for employers to make easy electronic super guarantee payments to all

funds.

Some small businesses have told us they used to spend a day each

quarter doing super. Business owners now using SuperStream have

reportedly cut time spent on super processing on average by about 70

per cent each cycle. In regards to funds, they now have much greater

automation and timely processing of transactions. For example, rollovers

within 3 days, improved efficiency, fewer lost accounts, a more timely

flow of money to accounts, greater real-time reporting, and a reduced

exposure to internal fraud.

Indeed a ‘snapshot’ of SuperStream benefits includes:



the consolidation of 1.02 million accounts valued at $4.7 billion

4.5 million TFN’s submitted were validated supporting improved TRN

quality

myGov has consolidated 529,285 accounts with a value of $2.53

billion during 2015-16

Employers, large and small, have been very receptive, and we estimate

about 98 per cent of all medium to large employers are compliant. 70 per

cent of small businesses have now implemented SuperStream and we

continue to support the remainder who are yet to adopt. The deadline

for SuperStream compliance was 30 June 2016; however, flexibility has

been extended until 28 October 2016.

3.2 Commencement of Government to Business Transactions

By way of an update and building on what has already been delivered

through SuperStream, we are bringing government transactions into the

data standard.

We plan to commence Government to Business transactions in

November 2016 by bringing ‘ATO to Fund’ rollovers into the standard,

allowing funds to do more real-time reporting.



This will be followed by ‘ATO to Fund’ contributions in May 2017 ; and

Business to Government transactions in late 2017 with ‘Fund to ATO’

rollovers.

3.3 SuperTICK

Looking ahead, funds should however, be making plans to migrate to

SuperTICK version 3 in time for the decommissioning of versions 1 and

2 in January 2017, noting that Version 3 enables mandatory reporting of

‘open’ and ‘closed’ accounts.

From the ATO’s perspective, SuperTICK and SuperTICK 2 are major

initiatives that have provided funds with more timely access to account

information to consolidate accounts, and improved data quality. Indeed,

funds undertook around 6.5 million SuperTICK transactions in 2015-16.

Notwithstanding its success there is always space for improvement. In

SuperTICK2 the reporting of new members was optional; we found that

approximately 50 per cent of funds provided this information. Going

forward for SuperTICK3 the reporting of new members will become

mandatory. This is important because it ensures members will have a

complete view of their superannuation accounts via myGov.



While the TFN is an optional field in versions 2 and 3 (mandatory in

version 1), funds are legally obliged to include in their validation requests

the TFN they hold for a given member.

Indeed, it is expected that funds would obtain a TFN for new members

so they can accept personal contributions and Government Co-

contributions, and avoid ‘No TFN’ income tax on employer contributions.

Another concern is that funds are using invalid TFNs to obtain a

response from SuperTICK, for example, placing dummy numbers or a

zero in the field. As stated in the SuperTICK user guide, funds should

not use default or dummy TFNs when sending validation requests.

3.4 Fund Validation Service (FVS)

The ATO Fund Validation Service (FVS) allows funds to check other

fund’s details prior to a rollover and to reconcile rollover data and allow

payment within three days to member accounts services.

I ask that you note, the ATO recommends that significant changes, such

as gateway or bank account, should be communicated 28 days prior to

the effective date. This is to ensure that SuperStream processes the

information with minimal errors for employers and trustees.



We do still find instances where trustees have not followed these

requirements, leading to errors in both rollover and contribution

transactions.

3.5 Diagnostics reports and voluntary disclosures

As I touched on earlier, a major advantage of our early engagement and

evidence-based approach is increasing the level of voluntary

disclosures, and this is expected to continue especially as funds update

their systems and ‘old system’ errors surface.

Of course we do appreciate that errors do occur and some examples

include:

three funds did not calculate the minimum pension payment correctly

at exit point, resulting in some members not meeting their minimum

pension amount

one fund incorrectly paid an insurance premium refund directly to

members in contravention of SISA payment standards impacting

16 members to a value of $16,000



two funds did not report on and pay Unpaid Super Monies (USM)

affecting about 70,000 members with a value of approximately

$51 million.

In terms of reporting gaps that have been identified:

we have found that thirty six percent of funds were not meeting the

expected standard for reporting lost members under $2000 and over

age 65 compared to 24 per cent last year.

we found that 15 per cent of funds this year did not satisfy the

‘duplicate TFN’ benchmark in their diagnostic report compared to 10

per cent from last year. To improve reporting, we have provided funds

that obtained poor results with a list of incorrect TFNs.

finally we found that only 70 per cent of Low Income Super

Contribution and Government Co-contributions Payment Variation

Advices’ were lodged on-time last year, and therefore we plan to

review about 5 funds to pinpoint the reasons behind this.

Why these things matter are that in any regulatory system, the accuracy

of data is an essential underlying requirement.



Naturally I appreciate this is not as easy as it sounds in dealing with

legacy systems and diverse platforms but it is important nevertheless.

Regulatory reporting is an obligation and responsibility for trustees.

Trustees and other accountable fund managers should not rely solely on

vendor-developed software or a ‘set and forget’ approach. There is a

need to conduct proper testing to assure the software complies with

reporting obligations.

3.6 Fund Mergers

More broadly, we hope we have provided the industry with greater

certainty on reporting requirements for mergers and acquisitions by

developing, with industry consultation, an Involuntary Superannuation

Account Transfer (ISAT) Protocol. This has received much positive

feedback and was updated in September 2015 due to new legislation.

In 2015–16, the protocol assisted 17 funds and administrators with

restructures, and administration and/or system platform changes

impacting millions of members and costly assets.



We also undertook three large Information Systems Risk Assessment

reviews (ISRA) with multiple funds, 12 transaction reviews, and four

separate reporting obligation reviews.

3.7 Recent technical issues and irritants

I would now like to share our approach to some technical issues and

irritants from the past year:

with respect to Disability lump sum benefit modification: a

concessional ATO view was published and our client relationship team

issued an alert to funds on 12 May 2015. We advised that for the

amount worked out under the modification formula in subsection 307-

145(3) of the ITAA 1997, any days that are included in both ‘service

days’ and ‘days to retirement’ in the denominator are to be counted

only once.

in relation to Qualified Recognised Overseas Pension Scheme

(QROPS) members (accounts with a UK component): if all assets,

except those relating to the QROPS members, are transferred under

a Successor Fund Transfer (SFT) (despite the fact that not all

members are being transferred as is generally required for CGT and



loss relief) the QROPS transfer restriction is beyond the trustee’s

control. The exception in 310-10(5) can therefore be relied upon to

gain access to the relief available for SFTs.

Further to CGT exempt contributions: the new law passed earlier in

the year enables funds to accept and report CGT exempt

contributions on look-through ‘earn out’ rights that are created on or

after 24 April 2016. The contributions may be accepted even if the

member is over 65 and no longer working at contribution time

I now invite Assistant Commissioner, Peter O’Reilly from Public Groups

and International (PG&I) to talk about our approach to income tax

compliance and some present income tax issues.



4 Income tax approach and focus areas

As in previous years our approach to engagement with large funds on

income tax obligations is directed towards the following objectives:

an assurance and risk-based approach that tailors our engagement

according to level of risk, and obtain ‘justified trust’ that funds are

complying with their income tax obligations and paying the correct

amount of income tax

understanding fund revenue trends and assist Treasury revenue

forecasts

identifying new or emerging issues and seek to provide assurance,

assistance, and clarification of the law or its administration where

there is uncertainty.

As I covered in my speech to this conference in 2014 i, we use risk

assessment approaches that combine quantitative data analysis with a

review of specific focus areas to determine compliance resource

allocation. We are increasingly looking to apply broader and more

leveraged mitigation treatments and approaches to address systemic

risks as identified.



It is worth spending a moment on the concept of ‘justified trust’ that we,

in Public and International Groups are working towards in our

administration of large corporates and super funds. The concept relates

to the level of assurance and confidence that a taxpayer has paid the

right amount of tax on their business and economic activities.

In practice, we aim to achieve justified trust from a more tailored

assurance approach, which includes examining four primary criteria from

each taxpayer’s profile:

understanding the tax governance framework

identifying any specific risks flagged to the market

understanding big abnormals/transactions

understanding why the accounting and tax results vary.

To help you assess your own tax profile we will now cover some of our

compliance focus areas, concentrating on changes to those I mentioned

at the 2014 Conference.



4.1 Governance and quality assurance for third-party data

Although not previously identified as a specific focus area, seeking

assurances on appropriate fund governance has formed a key element

of our engagement activities. We have typically concentrated on risk

assessment and assurance to safeguard third-party data accuracy used

for income tax compliance. This is still a risk area so industry

engagement continues.

The ATO has also published a Corporate Governance Framework. While

the framework is not specific to super funds, it still provides a useful

reference point on wide-ranging governance matters. From this, broader

engagement around these issues is anticipated in the future.

4.2 Foreign Income Tax Offset (FITO)

The purpose of the FITO is to prevent double taxation on income that is

taxable in Australia. The primary concern here is that some approaches

to calculating the FITO limit produce outcomes in excess of that needed

to prevent double taxation of income.



TR 2014/7 (in conjunction with the related Practical Compliance

Guidance for the 2015/16 Income Year) considers the foreign or

domestic source of hedging foreign exchange gains and losses, and

whether the losses are reasonably related to foreign income when

calculating the FITO limit. We are currently engaging with funds and their

advisers to ensure that they are aware of our views, approaches and

any other potential issues, and are responding appropriately. Some

funds have recently made voluntary disclosures correcting past

under-payments to align with our advice.

We will also focus on accurate calculation of reasonably related

deductions, other than FX losses. For example, allocation of investment

expenses based on a ratio of foreign investment income to total

investment income (excluding capital gains), or a ratio of foreign to total

assets may be appropriate methodologies. Apportionment based on a

ratio of foreign investment income to assessable income (including

contributions) is not considered to be a reasonable methodology.

Another area of concern is whether funds have documentation to

substantiate foreign taxes paid. We are investigating distribution

statements where it appears that incorrect amounts of foreign income

and foreign taxes paid have been reported to funds.



4.3 Exempt current pension income (ECPI)

Emerging areas of interest are the increased adoption of segregation as

the funds’ ECPI methodology, and the movement of assets into the

pension phase, including the potential application of Part IVA when the

selection methodology appears to be to obtain tax benefits. We are now

considering what advice we can issue to give greater guidance on where

the ‘risk flags’ are set and where compliance resources will be allocated

for follow up with funds.

4.4 Post-tax reporting

Our continued focus on this area stems from increased industry interest

in obtaining guidance. In addition to determining a number of PBR

lodged requests, we are now considering what guidance might be

provided on various tax parcel selection and tax optimisation strategies.

A part of this is considering the potential application of

Part IVA where strategies appear to be to obtain tax benefits. Once our

views become clearer we envisage undertaking further targeted

engagement before releasing general guidance.



4.5 Expenses

4.5.1 Update on TR 93/17

In December 2013, we released draft tax ruling TR 2013/D7 on the

apportionment of incurred expenses by a fund when it obtains both

assessable and non-assessable income. Extensive industry consultation

has taken place since the draft’s publication and we anticipate

finalisation in the near future.

Our main concern is to ensure funds are aware of the Addendum to the

Tax Ruling once published and to identify any emerging issues. The

treatment of expenses is likely to be raised in any compliance reviews

undertaken.



4.5.2 Fund Mergers

We continue to look at issues such as: revenue or capital

characterisation; implications of expenses paid directly by the fund or

through a fee paid to an administrator; availability of the

black-hole expenditure provisions under section 40-880; and

apportionment issues as outlined in TR 93/17. In regards to the latter,

we plan to examine if fair and reasonable outcomes have occurred when

rollovers have been included as contributions when calculating the

deductible portion of expenses.

4.5.3 Administrators

We have identified concerns about fee for service payments made to

administrators (internal or external) in the following areas: structural

changes; the development of new products; SuperStream

improvements; and other changes in response to legislative or

regulatory developments.

It appears that a significant element of capital expenditure may need to

be reflected when considering their deductibility either as in-house

software under Division 40 of the ITAA 1997, or the black-hole

provisions contained in section 40-880. We will continue to work with

industry to ensure that these costs are treated correctly.



We recently published a draft TR 2016/D1 about expenditure

deductibility when acquiring, developing, maintaining or modifying a

website for business use. It highlights the need to characterise whether

expenditure, including amounts paid to an administrator, is of a revenue

or capital nature.

4.5.4 Death and Disability Insurance Premiums

An emerging area of uncertainty is the appropriate treatment of income

protection insurance that includes the replacement of super guarantee

(SG) payments. Questions include the correct classification and

treatment of the contribution and deductibility of premiums by funds,

therefore we are engaging with industry to provide more clarification on

these products.

4.6 Imputation

As in previous years we continue to monitor imputation claim levels and

look for emerging issues.



As part of this work and in relation to other issues, we are engaging

more with custodians as key service providers of tax reporting to large

funds. This will help us to better understand how custodian practices,

systems and tax policies may potentially impact on funds’ obligations

under the income tax law.

4.7 International

A general observation is that we are seeking to improve our

understanding as to how funds are structuring their increasingly

significant levels of offshore investment.

We have also identified specific parts of uncertainty that can be grouped

under two areas: the first is the tax treatment of offshore limited

partnership treated as corporate limited partnerships, in particular the

meaning of ‘credits’ for the purposes of section 94M; and the second is

foreign hybrids. For the first area, we anticipate the publication of a draft

ruling later in the year.



There are two identified matters in relation to foreign hybrids: whether

the vehicle in question has satisfied Division 830 conditions to be treated

as a foreign hybrid; and the appropriate treatment of the sale of

underlying assets where investment in a hybrid is owned by a wholly

owned unit trust. The latter issue arises where the underlying investment

is short to medium term and whether returns should be considered the

outcome of ordinary business and therefore ordinary income. More

industry consultation is required in this space.

We are also aware that industry needs clarification around how the

Country by Country reporting regime will apply to funds, and we are

working to answer several question raised during the consultation

process. While the issues have proved to be more complex than initially

thought, we expect to provide the necessary guidance shortly. In the

meantime, funds can request exemptions form CbC reporting on a single

entity basis.

4.8 Capital Gains

In general our approach in this area remains similar to that described in

2014, but I would like to mention two specific developments.



The first is our interim guidance published on 8 June 2016 for preparing

2016 unit trust distribution statements. The interim advice was issued

ahead of a proposed Draft Tax Determination allowing trustees of unit

trusts to consider their approach, under self-assessment principles, to

determine distribution components, and capital gains and losses for

income years ending on or after 30 June 2016. This advice specifically

relates to determining the assessable, CGT Concessional and

tax-deferred components of the distributed gains for appropriate

cost-base adjustments of the unit holder’s trust interest under

CGT Event E4.

The second is that we are examining another CGT cost-base issue

where managed investment trust investors, such as superannuation

funds, are under-reporting capital gains under CGT Event E4 due to

limitations in custodian reporting systems. Some reporting systems used

by custodians incorrectly record a negative cost-base for specific unit

trust parcels without recognising these amounts as assessable capital

gains under the law when the tax-deferred amounts received exceed the

cost-base of the unit holding parcel.



4.9 PAYGI deferral

We have identified inconsistencies in how funds approach their PAYG

instalment obligations. Specifically, whether funds should lodge on a

monthly or quarterly basis and on what basis statutory income can be

attributed to a certain period. For example, assessable contributions and

transferred tax liabilities, and which taxpayer should recognise the

income.

4.10 Isolated and/or significant transactions

A general observation on this one is that we always look to understand

the tax consequences of new, unusual and/or significant transactions.

These are things that are difficult to pigeonhole, but examples would

include a large infrastructure investment, fund mergers or restructure.

That is the end of the income tax focus areas. Before handing back to

James to cover off on key topical issues and upcoming initiatives, I

would like to add that trustees can consider and self-review their own

circumstances from our income tax compliance focus areas. To gain

further certainty, trustees can also contact our PG&I superannuation

team through Team Leader, Mr Sven Kabel ([email protected]).

mailto:[email protected]



5 Looking Ahead

Let’s now look at key topical matters for the industry.

5.1 Superannuation reforms

As you are well aware the Federal Government’s proposed reforms

cover a range of proposed policy changes. As you can appreciate while

the proposals are still under development through governmental,

consultative and legislative processes there is some limitation on

commentary that I can make today.

What I do want to emphasise is that once laws are passed it will be a

priority for the ATO to implement them. An early part of our focus will be

engagement with all key stakeholders as we know that people will seek

certainty and indeed it is critical that we provide that certainty as early as

possible. We will support these efforts by providing communications that

are clear and concise.



It is clear that emerging administrative design principles for us will

include a recognition and understanding of the expectations of early

advice and ideally improved visibility on superannuation information and

advice from which people can make informed decisions and ensure they

can comply with any legislative changes or consequences for their

individual investment decisions.

To support the introduction of the new measures we will develop and

release what we now refer to as Law Companion Guidelines. These

guidelines, when finished, are public rulings and will provide our view of

how the law applies.

An outline of this approach is contained in Law Companion Guideline

2015/1 and such Guidelines are usually developed at the same time as

the drafting of the Bill. A Law Companion Guideline will normally be

published in draft form for comment when the Bill is introduced into

Parliament and will be finalised soon after the Bill receives Royal Assent.

It provides early certainty in relation to the application of the new law.

Such guidelines provide insight into the practical implications or detail of

recently enacted law in ways that may go beyond mere questions of

interpretation. For example, a Guideline might set out factors that the



ATO will be looking at as indicating a high or low risk of non-compliance.

Taxpayers that apply the guideline in good faith will be able to rely upon

such material.

5.2 Productivity Commission review

Another common matter of interest across the Superannuation Industry

is the Productivity Commission inquiry into the efficiency and

competiveness of the superannuation system.

On 3 August the Productivity Commission released its draft proposed

framework to assess the efficiency and competitiveness of

Australia's $2 trillion superannuation system for community

feedback.

The draft report outlines a very comprehensive framework so this will

be a most influential study.

5.3 Super & Tax Gap Estimates

The ATO plans to publish later this year in its Annual Report for 2015-16

a number of direct and indirect tax gap estimates. These will include gap



estimates for Super Guarantee (SG) contributions and APRA-regulated

income tax.

In relation to the SG gap estimate, this will not be a direct indicator of

operational effectiveness, but a high level gauge and long term estimate

of the difference between the amount of SG contributions required to be

paid under the Superannuation Guarantee (Administration) Act 1992 and

actual SG contributions made. The gap will consist of both non-payment

and underpayment of SG obligations.

The large funds income tax gap is the difference between the estimated

amount of an income tax liability or obligation payable assuming full

compliance with the law, and the amount actually reported to us (or

collected by us) for a defined period. It does not include an estimate of

the tax expenditures resulting from tax policy (that is, the policy gap).

We have developed an illustrative estimate for the income tax gap for

large superannuation funds. We anticipate media and community

interest in this work and emphasise that gap estimates should be viewed

in conjunction with our other performance measures.

For the SG gap, we will continue to focus our efforts on employers to

increase willing participation; and for the large fund income tax gap, we



will continue to support willing participation by funds, their compliance

with tax law, and paying the correct amount of income tax.

Employer compliance underpins the operation of the SG system and I

want to acknowledge that most employers pay the right amount of Super

Guarantee for their employees and contribute on time without any direct

intervention from the ATO or funds.

However, we do need to identify and address the drivers that cause SG

not to be paid. We need to work closely, and with employers directly as

we all have a role to support the retirement savings of Australians. It is

critical for community confidence in the system that employers do the

right thing. Where we see employers struggle it is important that we

assist and support them to meet their SG obligations in a timely and

fulsome way. Ultimately this is for the benefit of employees and their

retirement savings (as compulsory superannuation – through SG – is a

significant proportion of the retirement savings of most Australians.

I would encourage funds that where you see emerging trends, systemic

issues or even isolated instances related to SG matters to share these

concerns with us.



5.4 Super Services Dashboard

At a practical level, a new initiative, as part of our new online services,

we are building the Super Services Dashboard to provide real-time,

easy-to-understand information about SuperStream enabling services’

response rates and availability.

The aim of the dashboard is to communicate service availability and

performance in a timely way so as to maximise the number of service

production hours available to funds.

Service status and performance information will add value in situations

where a fund experiences processing issues, for example where the

service appears to be unavailable or response times are slow, by

clarifying whether there is an ATO side issue or not; this clarity will allow

users of the services to know, in near-real-time, whether they need to

address issues in their own systems or wait for the ATO to resolve its

issues.

We are piloting a live version of the dashboard with SuperStream

Technical Committee members from mid-day Friday 26th August with a

view of release in coming weeks.



5.5 New reporting to government framework

The ATO is moving to adopt industry standards and improve reporting to

more readily align with information collected and available from trustees.

As you know trustees currently report lost member details biannually and

member contribution data annually. To improve the efficiency of how

government supports and interacts with members of funds, we are

moving to capture account attributes in real time. This will also provide

members timelier account information.

To achieve this we are asking trustees to progressively improve the

timing of account information provided to the ATO. They will use a new

version of SuperTICK to send through account attributes such as open,

closed, accumulation and lost statuses of a members account. While a

trustee will still need to supply contribution data and the members

balance on 30 June via the annual report, they will no longer need to

provide the account attributes at this time. These improvements in

reporting will assist in removing over 200,000 errors annually where the

ATO attempts to interact with those accounts which have been closed or

are unable to accept payments. In practical terms what this means is a

reduction for funds in the time spent returning contributions to the ATO.



In addition, we will no longer require funds to build ‘ATO-only’ systems

and reporting frameworks. We will adopt the standard trustee now use

for around 1.5 million rollovers every year. This includes adopting the

business-to-business rollover standard for both the payment of

unclaimed super monies in Quarter 4 2016, and the collection of

unclaimed monies in Quarter 4 2017.

We are continuing to look for opportunities to leverage existing

standards and services implemented by trustees to improve the

efficiency of future reporting obligations.

5.6 Working with tax professionals

Another part of our change process is for registered tax professionals to

have easier and timely access to information.

We are currently working to deliver the commitments our Commissioner

made to the tax profession in his speech to The Tax Institute in March

this year.

These commitments reflect the importance of the relationship between

the tax profession and the ATO, how we work together to understand

their needs, and improving online services for tax practitioners.



6 Conclusion

To conclude, it is necessary to refer to our exciting and continuing

transformation as an organisation and regulator. Feedback indicated

that people wanted us to provide certainty, tailor services to their needs

and make things easier and better.

Further and progressive delivery to large funds and other partners in the

super ‘ecosystem’ is part of this journey and therefore an essential

partnership.

From these strong partnerships comes an increase in transparency and

collaboration, which in turn raises voluntary compliance, and initiatives

are implemented with greater understanding, cooperation and measures

of shared success.

I look forward to continuing these partnerships to promote and protect

the retirement savings of all Australian’s. Thank you.

i “ATO audits and reviews of super funds in 2014”. Speech to the Tax Institute National Superannuation Conference, Melbourne, August 2014.

national superannuation conference€¦ · conference session 2a ato presentation: apra-regulated...

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