Hi,
I recently discovered an old superannuation account that was started in 2003. No contributions were ever made, apart from the initial rollover amount.
All money has been eaten up over the years by insurance premiums and fees.
I believe the trustee should have reported my account to the ATO as a lost member after two years of inactivity. However, the trustee thinks they were not required to because their policy is to only report members as “lost” if their account is inactive AND they have received two pieces of returned mail.
But, when I look at the definition of 'lost member' in the Superannuation Industry (Supervision) Regulations 1994 (Federal Register of Legislation - Australian Government), a ‘lost member’ seems to be consistently defined as uncontactable OR inactive. Rather than uncontactable AND inactive.
For example, text from the version of the regulations for the period 05 Apr 2007 to 30 Jun 2007 reads:
1.03A Lost member
(1) A member of a fund is taken to be a lost member at a particular time if:
(a) the member is uncontactable, that is, if and only if:
(i) the fund has never had an address for him or her; or
(ii) 2 written communications or, if the trustee so chooses, 1 written communication have been sent by the fund to the member’s last known address and returned unclaimed; or
(b) the member is an inactive member, that is, if and only if:
(i) he or she has been a member of the fund for longer than 2 years; and
(ia) he or she was, at the time he or she joined the fund, a person in respect of whom there was in effect a contribution arrangement of the kind referred to in subsection 16 (5) of the Act (which deals with the definition of a standard employer‑sponsored member); and
(ii) the fund has not received a contribution or rollover in respect of him or her within the last 2 years of his or her membership of the fund; or
(c) the member joined the fund from another fund or an EPSSS as a lost member; or
(ca) the member joined the fund from an RSA provider as a lost RSA holder;
unless:
(d) within the last 2 years of the member’s membership, the trustee of the fund has verified that the member’s address is correct and has no reason to believe that that address is now incorrect; or
(e) the member is permanently excluded from being a lost member.
(2) For the purposes of subregulation (1), and subject to subregulation (3), a member of a fund is permanently excluded from being a lost member if:
(a) the member is an inactive member who has indicated by a positive act (for example, deferring a benefit in the fund) that he or she wishes to continue to be a member of the fund; or
(b) the member has contacted the fund at any time after the time at which he or she joined the fund and indicated that he or she wishes to continue being a member of the fund; or
(c) the member is a member of a self-managed superannuation fund.
(3) The trustee of a fund may decide that:
(a) a member, a class of members, or all members of the fund cannot be permanently excluded from becoming lost members; or
(b) a member who is, a class of members who are, or all members of the fund who are permanently excluded from being lost is or are not to continue being permanently excluded from being lost.
Because of the 'or' between part 1(a) and 1(b), I believe I should have been deemed a lost member due to account inactivity alone and the trustee should have reported my account to the ATO after 2 years of inactivity.
Do you think I am correct, or is the trustee right?
I recently discovered an old superannuation account that was started in 2003. No contributions were ever made, apart from the initial rollover amount.
All money has been eaten up over the years by insurance premiums and fees.
I believe the trustee should have reported my account to the ATO as a lost member after two years of inactivity. However, the trustee thinks they were not required to because their policy is to only report members as “lost” if their account is inactive AND they have received two pieces of returned mail.
But, when I look at the definition of 'lost member' in the Superannuation Industry (Supervision) Regulations 1994 (Federal Register of Legislation - Australian Government), a ‘lost member’ seems to be consistently defined as uncontactable OR inactive. Rather than uncontactable AND inactive.
For example, text from the version of the regulations for the period 05 Apr 2007 to 30 Jun 2007 reads:
1.03A Lost member
(1) A member of a fund is taken to be a lost member at a particular time if:
(a) the member is uncontactable, that is, if and only if:
(i) the fund has never had an address for him or her; or
(ii) 2 written communications or, if the trustee so chooses, 1 written communication have been sent by the fund to the member’s last known address and returned unclaimed; or
(b) the member is an inactive member, that is, if and only if:
(i) he or she has been a member of the fund for longer than 2 years; and
(ia) he or she was, at the time he or she joined the fund, a person in respect of whom there was in effect a contribution arrangement of the kind referred to in subsection 16 (5) of the Act (which deals with the definition of a standard employer‑sponsored member); and
(ii) the fund has not received a contribution or rollover in respect of him or her within the last 2 years of his or her membership of the fund; or
(c) the member joined the fund from another fund or an EPSSS as a lost member; or
(ca) the member joined the fund from an RSA provider as a lost RSA holder;
unless:
(d) within the last 2 years of the member’s membership, the trustee of the fund has verified that the member’s address is correct and has no reason to believe that that address is now incorrect; or
(e) the member is permanently excluded from being a lost member.
(2) For the purposes of subregulation (1), and subject to subregulation (3), a member of a fund is permanently excluded from being a lost member if:
(a) the member is an inactive member who has indicated by a positive act (for example, deferring a benefit in the fund) that he or she wishes to continue to be a member of the fund; or
(b) the member has contacted the fund at any time after the time at which he or she joined the fund and indicated that he or she wishes to continue being a member of the fund; or
(c) the member is a member of a self-managed superannuation fund.
(3) The trustee of a fund may decide that:
(a) a member, a class of members, or all members of the fund cannot be permanently excluded from becoming lost members; or
(b) a member who is, a class of members who are, or all members of the fund who are permanently excluded from being lost is or are not to continue being permanently excluded from being lost.
Because of the 'or' between part 1(a) and 1(b), I believe I should have been deemed a lost member due to account inactivity alone and the trustee should have reported my account to the ATO after 2 years of inactivity.
Do you think I am correct, or is the trustee right?
