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  • Superannuation Diagnostic Report for large APRA Funds key messages November 2018

    Welcome

    Jenny Lin, Acting Assistant Commissioner Super Technical Leadership and Advice welcomed the group to the first meeting.

    2018 Diagnostic Report

    • The 2018 iteration of the Risk Differentiation Framework Diagnostic report will largely be similar to previous iterations. Indicator 10 (Timeliness of Lost Member Super) will not be run for the 2018 Risk Differentiation Framework report, however the past year performances will still be displayed.
    • Given the recent changes in the reporting environment, Key Clients and High risk clients will receive the 2018 Risk Differentiation Framework report in draft, to clarify and provide feedback on anomalies that may have occurred due to the transition to and on-boarding of Member Account Attribute Service (MAAS) and Member Account Transaction Service (MATS). The ATO will consider feedback received, review the relevant data and either make minor changes to the indicators/results or provide context to the indicator results through soft data.
    • The 2018 Risk Differentiation Framework reports are likely to issue later than in previous years, as Key Clients and High risk clients will be given two weeks to provide feedback on the draft reports.

    Diagnostic Report Redesign

    • The Risk Differentiation Framework is being redesigned to relevantly address the changing reporting environment for Large APRA funds. With Member Account Attribute Service and Member Account Transaction Service on-boarding, we envisage the redesigned Risk Differentiation Framework will provide contemporary and more meaningful reports utilising real-time data.
    • The redesigned Risk Differentiation Framework will also provide assurance that funds met their reporting obligations accurately and timely.
    • The redesigned Risk Differentiation Framework will entail three measures to obtain justified assurance. Key Clients and High risk clients will receive a detailed report addressing all three measures: hard data, soft data and data governance. For medium risk and low risk clients, assurance will be assessed by hard data, at the minimum.
    • Hard data is the data received via Member Account Attribute Service and Member Account Transaction Service as well as other data received by the ATO from funds. Hard data will be used to identity Key Clients and High, medium and low risk clients. New indicators will be developed to ensure coverage of all reporting obligations, where possible.
    • Soft data is extracted from industry intelligence and funds interactions with the ATO. Soft data will be used to formulate behavioural indicators that will moderate certain ratings.
    • Data governance is an assessment of the processes and controls applied by funds to assure the completeness and accuracy of data reported. Data governance may involve a self-assessment questionnaire on the funds' processes and controls and managing and reporting data.

    Industry Consultation

    • The Risk Differentiation Framework redesign concept will be the subject of industry consultations. The ATO will seek to co-design the key aspects of the redesigned Risk Differentiation Framework to ensure that the report is contemporary, useful and relevant to the superannuation industry and the individual funds. The key to these consultations is to develop a multi-functional report that can serve more than one stakeholder, encouraging willing participation and voluntary compliance in the superannuation industry.
    • The ATO envisages holding regular consultations starting in 2019, to work with industry stakeholders in the co-design of the Risk Differentiation Framework.
    • The concept of a dashboard is under consideration. Insight from industry stakeholders is sought as to the purpose and functionality of a dashboard.
      Last modified: 21 May 2019QC 58972