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AIST calls for online TFN verification in super
Real-time online tax file number (TFN) verification would reduce administrative errors and ensure confidence in the integrity of the TFN as a primary identifier, according to the Australian Institute of Superannuation Trustees (AIST).
The verification could be provided when a new TFN is entered into the administration system and would enable the super fund to take immediate action if the TFN provided was incorrect, according to AIST chief executive Fiona Reynolds.
“The TFN is only going to work if everybody is 100 per cent confident that the number they have in front of them is the correct one,” Reynolds said.
In its discussion paper, ‘The silver bullet? Using tax file numbers as the primary superannuation account identifier’, the AIST called for the use of TFNs as a primary identifier, along with online verification, to be implemented on 1 July this year.
The use of TFNs in the auto-consolidation of super funds needs to address concerns about insurance cover, loss of services and protection from consolidation into high-fee superannuation products, the paper stated.
The AIST recommended that consolidation arrangements between super funds operate on an opt-out basis for members of MySuper products but on an opt-in basis for members of choice products because consolidation would benefit members who were not engaged with their super, while engaged members may have made conscious decisions to hold multiple accounts.
The AIST also recommended that the SuperStream subgroup be tasked with liaising with the Australian Prudential Regulation Authority and that the superannuation industry develop a set of guidelines to address consolidation between super funds.
The AIST further recommended super funds review privacy policies following any change to the use of TFNs; that the Government commit to funding Australian Taxation Office costs related to the extension of the TFN as the primary identifier; and that an individual’s quotation of their TFN remain voluntary.
AUTHOR
Mike Taylor
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