STREAMLINING THE SUPER SYSTEM FOR CONSUMERS. John George. 26 November 2014

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1 STREAMLINING THE SUPER SYSTEM FOR CONSUMERS John George 26 November

2 Background to super reforms Super Stream is a package of measures designed to bring the back office of superannuation into the 21st century. Its key components are the increased use of technology, uniform data standards, use of the tax file number as a key identifier and the straight through processing of superannuation transactions. Cooper Review,

3 TIMELINE OF CHANGES FOR SUPER SYSTEM PAST FUTURE Super guarantee starts at 3% (4% for large employers). Brings many new individuals into super system, including temporary and casual workers Member protection rules introduced for accounts with balances up to $1,000 FUND REPORTING Member contributions statement (MCS) Lost members statement (LMS) Unclaimed super monies statement (USMS) VISIBILITY OF ACCOUNTS Individuals Super funds Super holding account (SHA) opens to employer contributions MCS reporting starts for active accounts Lost member reporting starts Temporary residents become able to claim super on leaving Australia ATO becomes responsible for lost member administration Unclaimed super monies (USM) reporting starts for unclaimed eligibility age and death benefit amounts Unclaimed spouse accounts added to general USM category SuperSeeker becomes available for individuals to find their lost and ATO held super DASP online becomes available for temporary residents to find and claim their super SuperMatch becomes available for funds to find lost and ATO held super for their members SHA closes to employer deposits Inactivity period for inactive lost increases from 2 to 5 years Most USM starts being sent to ATO (previously sent to state / territory agencies) Former temporary resident super added to USM Rollover data standard takes effect MCS ACCOUNTS ( ) 13 million active accounts 22 million inactive accounts Inactive accounts reported on MCS MCS now covers all fund held super accounts Small lost ($200) and insoluble lost added to USM AVERAGE ACCOUNTS CONSOLIDATED 400 in prior to mygov Standardised 1,800 since joining mygov portability form created Portability form can be sent electronically 35 million total accounts MCS, LMS and USMS combined into a single report? Small lost threshold increases to $4,000 Small lost threshold increases to $6,000 Small lost threshold increases to $2,000 5 year inactivity period for insoluble lost reduced to 12 months ATO online portal displays active and ATO held super Electronic portability form updated to AVERAGE DAILY SEARCHES enable fund and ATO held super to be consolidated 1,500 in 2013/14 in one prior transaction to mygov Inactive accounts become visible on ATO online SuperSeeker 41,000 quick since search joining enabled mygov via ATO app, link to ATO online via mygov site also included in ATO app Direct claim of ATO held super enabled in ATO online SuperMatch becomes available as a web service USE OF TFNS S(UMLM) Act brings together lost and unclaimed law. TFN use is extended to lost members No TFN tax introduced Funds can t accept nonconcessional contributions unless a TFN has been reported New laws enable ATO to correct TFNs held by funds SuperTick service introduced to allow funds to validate member details New law enables ATO to provide TFNs to funds where TFN has been quoted for super purposes TFNs PROVIDED EmployerTick TO service introduced to allow FUNDS employers to validate employee details 1.73 million in June 2014 TFN becomes optional in SuperTick

4 Super reform Delivered to date: reporting inactive accounts from 13M to 35M provisions of TFNs 1.7M TFNs to funds enhancements to SuperSeeker portal - broader account display functionality - electronic portability form - now in mygov and ATO app rollovers in data and payment standard SuperTICK and fund validation service 4

5 The extent of accounts in our system Super accounts and account holders as at 30 June 2013 Total super accounts Total super account holders Accumulation phase accounts 35.4m Active accounts 39.6m Inactive accounts 13.2m 22.2m Pension phase accounts 4.2m One account only 7.9 m (56.5%) Two accounts 3.7 m (26%) 14m Three accounts 1.5 m (10.5%) Four or more accounts 0.9 m (7%) ATO held accounts* 4.5m Fund held Lost accounts* 1.7m Fund held other inactive accounts* 16m Unclaimed super monies (USM) accounts* Super holding account (SHA) accounts* 4.3m 0.2m *- The account numbers for these categories are sourced as at 30 June

6 Other strategies INDIVIDUALS Media releases/social media campaigns SMS/ campaigns Social Media Publishing key statistics on our website FUNDS Super Match Provision of addresses and phone numbers to funds 6

7 Media coverage & social media QLD s ahead in super! #QLD have lost $2 billion less in super than #NSW. This # StateofOrigin, tackle lost Source: 7

8 Download the app 8

9 MyGov 9

10 ATO s online services 10

11 Accounts consolidated 11

12 Testimonials Just consolidated my super after many half-hearted attempts. The ATO has an amazing online consolidation service. Linked my ATO to my mygov account. Turns out I have about 10K in super across half a dozen different services!!! Just wanted to let you guys know how impressed I was with mytax! And especially consolidating all (7) of my superannuation accounts in under five minutes. Have been raving to anyone who will listen :-) 12

13 Testimonials Just used the new ATO online system to transfer some of my unclaimed super into my main account. Took two minutes and was so easy. Great job ATO looking forward to the day when all transactions with govt bodies will be this easy! new set-up to claim your tax is the best yet. I was even able to view my student loans and super on it. #impressed 13

14 Thank you Australian Taxation Office

15 Discussion