Indexed TBC may shift after late reporting

indexation TBC reporting

The final status of personal transfer balance caps after indexation may not be settled until all late or retrospective reporting by funds is completed.

The ATO has reminded superannuation funds that it will calculate the indexation of personal transfer balance cap (TBC) of members based on information it has to hand at the end of the financial year and late or retrospective reporting may alter that position.

In an update issued to superannuation funds, the regulator noted the proposed indexation of the general TBC will take place on 1 July 2023 and lift the TBC from $1.7 million to $1.9 million, and it would use data available to hand at 5pm the day before.

“The calculation occurs using the information received and processed by us as at close of business 30 June 2023. We’ll use and display what we consider the individual’s personal TBC to be,” it stated.

“We identify the highest-ever balance in the individual’s transfer balance account. We’ll use this information to calculate the proportional increase in their TBC and apply that new personal TBC to their account going forward. This means they’ll have a personal TBC between $1.6 million and $1.9 million.

“An individual who already had a transfer balance account and at any time met or exceeded their personal TBC will not be entitled to indexation and their personal TBC will remain the same.”

It added late or retrospective reporting by superannuation providers after indexation had taken place would have an effect and may require it to recalculate the personal TBC of super fund members.

“If this [late or retrospective reporting] occurs, there may be significant consequences for the individual. We’ll reconsider if there was an entitlement to proportional indexation and apply this new information to their account,” it said.

It reminded funds that despite any revised TBCs being impacted by their reporting, individual members were still restricted in accessing that information for themselves.

“After indexation, ATO online services (and online services for agents) will be the only place an individual who had a transfer balance account prior to indexation will be able to see their personal TBC,” it said.

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