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Excess transfer balance determination

 

Overview

If a member has received an excess transfer balance determination from the ATO, they will be required to commute the excess amount over the transfer balance cap.

This is a reportable event, and will need to be reported on the TBAR for the member that is required to make the commutation.

The event type to be reported on the TBAR depends on whether the excess transfer balance amount was an ATO-initiated commutation or a voluntary commutation.

Voluntary vs ATO-initiated commutations

For more details on when a commutation is voluntary or ATO-initiated, please refer to the following ATO article: Excess Transfer Balance

If the amount is commuted as a voluntary commutation, this will be reported as a standard member commutation in the TBAR automatically in Simple Fund 360. (e.g. event type MCO).

If the fund processes an ATO-initiated commutation as a result of receiving a commutation authority, this will need to be reported on the TBAR.

The type of event to report will depend on whether the entire or partial commutation authority amount is commuted:

  • CC1 : Commutation Authority - The amount requested has been commuted in full
  • CC2 : Commutation Authority - unable to commute in full due to insufficient funds
  • CC3 : Commutation Authority - unable to commute due to the member is deceased
  • CC4 : Commutation Authority - unable to commute due to a capped defined benefit income stream

Instructions

To process this in Simple Fund 360:

  1. Process a commutation for the member. In the Transfer Balance Cap section of the Internal Transfer / Commutation Wizard change the event type to CC1 - Commutation Authority amount commuted in full.

    CC2, CC3, CC4

    These options are still being added to the Event list. For events of this type, please select CC1. This will be edited later.

  2. Navigate to the Transfer Balance Dashboard:
    From the Main Toolbar, go to Member.

    Select Transfer balance dashboard from the list.



  3. Locate the event listed under the Member:


  4. Click the Edit icon  next to the event.

  5. Change the Event Type to the appropriate event (CC2, CC3, CC4)


  6. Click the green tick icon  to save the change for the event.

  7. This will tick the appropriate areas in the TBAR form generated:

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