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Reporting issues persist for superannuation funds

Reporting issues persist for superannuation funds

The Tax Office is continuing to see a number of reporting issues crop up with commutation authorities among APRA-regulated superannuation funds, which accountants should be wary of to avoid adverse client outcomes.  

Tax&Compliance Miranda Brownlee 10 December 2018
— 1 minute read

In an online update, the ATO said that it is continuing to see fund-reporting issues occur in relation to commutation authorities that are creating reverse workflow for funds and the ATO, with these issues potentially creating adverse outcomes for members.

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It reminded funds that the commutation authority does not authorise them to commute a member’s income stream after the due date.

“You must comply with the commutation authority by the due date, even if we have issued a commutation authority for a small amount, unless the commutation authority has been issued in relation to a capped defined benefit income stream or the member is deceased,” it said.

It also reminded public offer funds to report their response to the commutation authority even if they are not able to commute the full amount set out in the commutation authority, or they are not commuting an amount because it relates to a capped defined benefit income stream or the member is deceased.

“If you are unable to commute any amount because we have issued a commutation authority in relation to an account that is closed, you should report that you have partially complied with the commutation, and amount of nil and that the account is closed,” it said.

Member-initiated commutations that occurred before the issue date of the commutation authority and were not reported to the ATO should be reported as a member commutation in a timely manner, so that the ATO can amend or revoke the commutation authority, it said.

In response to feedback, the ATO said that it is changing the address it uses to send the commutation authority.

“Currently, we use your client level, or ABN address in our systems, but we will [now] be using your superannuation postal address, or if you have registered it with us, your supplier address,” it explained.

Reporting issues persist for superannuation funds
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