May 18, 2021

Retirement fund (superannuation) regulations and legislation

Protect your fund and customers from existing and new emerging threats, including fraud and identity theft.

# Insights

Retirement funds worldwide provide monetary support to individuals after a certain age depending on the country’s rules and regulations. These funds are called 401(k) in the United States of America, pension in many other parts of the world and superannuation in Australia. Retirement funds aid the monthly living expenses after retirement, making life after retirement easy. 

In Australia, superannuation aims to provide income in retirement and take the burden off the Australian Government. Over the last 30 years, the Australian superannuation industry has grown to over 500 funds, and they are represented by industry, government or staff superannuation companies. 

The Australian Taxation Office (ATO) recently reported that 27% of individuals have 4 active superannuation accounts. The report highlights the lack of control people have around consolidating their super when they change employment situations. People pay fees across multiple accounts, and superannuation companies face the costs of administrating and verifying their users regularly.

Percentage of accounts held by an individual

The good news is that the report has highlighted a steady increase in account consolidation over the last 4 years. Consumers have become more savvy and aware of the issues when they do not consolidate their money into a single account. The number of consolidations has seen a drastic jump from 538,000 accounts in 2019 to 663,000 accounts in 2020. The growing value ($6.9 billion in 2020) demonstrates how significant the value of these dormant accounts can be.  

Accounts consolidated by individuals using ATO online services

Note: Accounts have been rounded to the nearest 1,000. Values have been rounded to the nearest $100 million.

The companies providing superannuation services after the individual has registered with the Australian Taxation Office (ATO) are required to perform the following:

Superannuation requirements for companies

Identity verification

Superannuation funds need to take reasonable steps to identify individuals and who they claim to be. They will need a certified copy – certified is when you take it to a police station to get it authorised that will be used in case things go wrong or they identify a false identity. 

AML – PEPs and Sanction wash

A PEPs and Sanction wash is necessary for companies to identify high-risk customers from receiving the company benefits. Screening your customers can help prevent the organisation from undertaking or being involved with illegal activities. We take the opportunity to update any missing or incorrect details and remove duplicates in your customer file when processing a wash. Screening your customer file is an essential step for ongoing due diligence and satisfying ongoing AML/CTF requirements.


In response to the COVID-19 crisis, AUSTRAC set new Know Your Customer (KYC) expectations for an initiative to assist with the release of early superannuation funds. This meant that when the ATO has approved the payment, superannuation funds will not have to carry out their customer identification procedure before making these payments to their members.

Despite the identity verification rule change, the obligations under the Anti Money Laundering and Counter-Terrorism Financing Act 2006 still apply, along with ongoing customer due diligence and reporting the suspicious matter. Continuing to comply with these other obligations, which are required when suspecting a customer is not who they claim to be, will help protect funds from existing and new and emerging threats, including fraud and identity theft.

The legislative reforms on 1st January 2021 expand the Australian Securities and Investments Commission (ASIC) role as the conduct regulator for superannuation and increasing consumer protection powers. ASIC ensures no regulatory gaps in the super system, effectively regulating superannuation trustee conduct without corresponding from the Australian Prudential Regulatory Authority (APRA – the prudential regulators). 

How Data Zoo can get your due diligence on point 

Superannuation companies are required to comply with the ATO and its regulations while maintaining ongoing customer due diligence. We can assist superannuation companies in meeting their identity verification and AML requirements by providing configurable matching logic; accessing government and other databases to meet the organisations’ needs. Data Zoo can deliver these services in two ways:

  1. Real-time API - The API is a fully configurable system that will allow you to acquire and sequence against all the databases we hold and return the results to you in real-time.

  2. Remediation - For these services, you will provide a file, and based on your matching requirements, we will verify and update your entire customer database as per your identity requirements, including PEP’s and sanction screening and death check. This service can clean and validate your whole customer data within 72 hours, processing 100 records a second.

Data Zoo has industry-leading match rates and unparalleled response times for electronic identity verification. With absolute confidence in our solution, we charge per match. Our solution, IDU®, is designed to accommodate any industry or organisation. Depending on your AML, CTF, KYC and identity requirements, we provide an adaptable model that allows; name/address cleansing, risk-based profiling, customised rulesets, multi-source verification, search sequencing, pre-validation, ongoing match results and historical transactions. All our processes are automated, not storing any individual’s Personal Identifiable Information (PII) in the systems providing a clear data trail for auditors.

Data Zoo makes it easy to onboard and verify customers quickly

Get in touch and let us know how we can help