Large fund industry report

2018 RDF high level industry results

Each fund was rated using a common set of 12 likelihood indicators and seven consequence indicators, with the consolidated results summarised in the graph below.

For 2018, 93% of funds were in the lower risk category, along with 6% for key client funds and 1% for medium risk funds.

The high level results show us that 99% of funds were rated as having a good standard of reporting, which is the same as last year. These are all the funds categorised as Lower risk or Key client.

This year, 50% of funds have either maintained or improved their results. And for the fourth year in a row, there are no funds classified as higher risk.

Figure 1 – Placement of RDF population

Table 1: Comparison of classification over five years
Classification	2018	2017	2016	2015	2014
Higher Risk (top right)	0	0	0	0	2
Key Client (top left)	14	16	17	18	14
Medium Risk (bottom right)	1	3	2	2	8
Lower Risk (bottom left)	195	212	227	236	225
Not Rated	10	6	5	5	16
TOTAL	220	237	251	261	265

Table 2: Comparison of consequence indicators over five years
Consequence indicators	2018	2017	2016	2015	2014
1. Membership	25,837,194	26,865,118	27,013,599	28,613,114	21,511,696
2. Contributions	$95,102,039,505	$105,579,608,320	$91,229,279,953	$93,741,445,523	$82,557,036,147
3. Account Balances	$1,658,474,172,342	$1,676,950,054,771	$1,399,424,807,762	$1,300,143,929,591	$1,194,438,187,438
4. Active MCS lodged	14,308,424	14,088,659	13,650,578	13,765,445	13,750,039
5. Inactive MCS lodged	16,988,675	18,076,847	18,901,544	18,706,511	19,345,967
6. Number of Lost accounts	868,547	665,397	580,455	1,223,338	1,308,237
7. Total value of Lost accounts	$17,366,888,956	$13,393,311,875	$11,315,422,964	$13,318,008,700	$13,161,657,731

Data for each year is for the period 1 July to 30 June for that financial year, taken as at 31 December following the end of that financial year.

The seven indicators above are used to determine a funds consequence rating.

The fund’s membership was obtained from the 2018 income tax return.

The values for contributions, account balances, active MCS and inactive MCS were obtained from the 2018 member contributions statement.

We obtained the number and the value of lost member accounts from the MAAS and the 2018 member contributions statement.
The number of lost accounts was obtained from the lost status reported via the MAAS as at 31 December 2018. This figure includes both lost uncontactable and inactive accounts.

Table 3: percentage of funds that met the benchmark
Indicator	2018	2017	2016	2015	2014
1. Personal contribution without TFN	95.85	94.00	93.09	90.87	91.30
2. Correct TFN quoted	83.57	81.00	74.10	69.73	62.30
3. Duplicate TFNs	90.61	90.50	86.94	85.43	89.68
4. Non Individual TFNs	97.65	95.70	94.29	94.09	68.65
5. Timeliness of MCS lodgment	94.09	89.00	95.22	95.79	93.21
6. Completeness of MCS lodgment	81.29	77.30	66.83	57.53	38.83
7. Open and lost member accounts	44.09	40.00	42.23	41.76	26.96
8. Lost members > 65 years old	67.09	57.47	65.71	63.77	75.86
9. Lost accounts < $6,000	43.67	48.20	80.00	51.21	43.84
10. Timeliness of USM	83.10	86.70	80.00	87.04	78.52
11. Timeliness of co-contribution remittance PVAs	71.24	74.00	77.96	68.56	69.70
12. Timeliness of LISC remittance PVAs	63.58	76.40	74.04	70.27	63.72

Overall the top eight indicators improved and the final four indicators declined from 2017.

Table 4: indicators explained
Indicator	Explanation	Importance	Benchmark
1. Personal contribution without a TFN	Percentage of MCSs with personal contribution reported by a fund	This indicator will help funds identify potential breaches of the contributions standard. It also encourages a best practice approach in accepting and identifying compliant contributions.	≤0.05%
2. Correct TFN quoted	Number of quoted TFNs matched with the ATO-derived TFNs	N/A	≥97%
3. Duplicate TFNs	Number of instances where the same TFN is reported for different individuals	Correct TFN data ensures payments are streamed to the correct accounts and gives confidence to funds in the accuracy of the data provided during contributions and rollovers. It also enables electronic transfers and payments. Additionally, correct TFN data enables members to track their super and consolidate multiple accounts online	≤0.1%
4. Non-individual TFNs	Number of instances where the reported TFN is for a 5non-individual	Correct TFN data ensures payments are streamed to the correct accounts and gives confidence to funds in the accuracy of the data provided during contributions and rollovers. It also enables electronic transfers and payments. Additionally, correct TFN data enables members to track their super and consolidate multiple accounts online	≤0.03%
5. Timeliness of MCS lodgment	Number of original MCSs lodged within the prescribed timeframe	Timely and complete lodgment of the MCS ensures we are able to assess and pay government contributions in a timely manner. It also ensures member information is displayed in myGov as soon as possible.	≥95% within seven days
6. Completeness of MCS lodgment	Compares the 'number of distinct individuals with open, open & lost and closed pension accounts’ reported on the MCS with the 'number of members’ reported on the fund's income tax return	Timely and complete lodgment of the MCS ensures we are able to assess and pay government contributions in a timely manner. It also ensures member information is displayed in myGov as soon as possible.	90%
7. 'Open and Lost' MCS accounts	Compares the 'number of lost un-contactable members’ from the Lost Member Register with the 'number of members with account status open and lost’ in MCS	Accurate reporting of member status of open and lost accounts allows members to view and consolidate accounts in myGov	90% – 110%
8. Lost members >65 years	Number of members over 65 years old on the LMR	Accurate and current LMS & USM data is fundamental to our important work of reuniting members with lost or unclaimed super. This information also ensures members are able to view accurate account information in myGov	≤1.91
9. Lost accounts <$6,000	Number of members with an account balance under $6000 on the LMR	Accurate and current LMS & USM data is fundamental to our important work of reuniting members with lost or unclaimed super. This information also ensures members are able to view accurate account information in myGov.	≤1.91%
10. Timeliness of USM	Number of original USMs lodged within the prescribed timeframe	Accurate and current LMS & USM data is fundamental to our important work of reuniting members with lost or unclaimed super. This information also ensures members are able to view accurate account information in myGov.	≥95% within 7 days
11 & 12. Timeliness of co-contribution and LISC remittance PVAs	Timeframe during which a fund reaches a total of 98% of co-contributions and LISC remittance PVAs lodged	Timely lodgment of remittance payment variation advices (PVA) enables us to redirect payments to eligible member accounts as soon as possible to maximise interest income on member benefits.	≥98% within 14 days

Indicators improved

The results for all four tax file number (TFN) indicators improved slightly from last year. This reflects the industry’s effort to improve the quality of their data in preparing for event-based reporting via MAAS and MATS.

We’ve also seen an improvement in several other indicators from 2017, including:

timeliness of MCS lodgment
completeness of MCS accounts
open and lost member accounts
lost members over 65 years of age.

Note: We are cognisant that the result for the open and lost MCS accounts indicator can be impacted by timing differences in the lodgment of the MCS and the MAAS.

Indicators declined

There has been a further decline from 2017 of the lost accounts under $6,000 indicator:

Only 43.67% of funds met the benchmark, which is the lowest result since the RDF began in 2014 - reuniting members with their lost super will be one of our key focus areas over the coming year, and we will be engaging with funds, especially where their results are below the benchmark.
We encourage funds to be proactive regarding their lost members, and envisage that the provision of an address functionality built into the MAAS will assist funds in achieving this goal.

We also saw a decline in the results for three of the five timeliness indicators:

Of particular concern is the decline in the result for timeliness of low income super contribution (LISC) remittance payment variation advice (PVA)s, which has gone from 76.4% in 2017 to 63.58% in 2018., with the results for timeliness of USM and timeliness of co-contribution remittance PVAs also declined from 2017.
With PVA reporting, we’ve seen cases where funds have submitted a payment to us without a message - we’ve also seen cases where the payment reference number used for a payment does not match with one reported in the message.

Key areas for improvement

Based on the 2018 results, we have identified the top three areas where we would like to see some improvement in reporting moving forward. These are:

Lost accounts under $6,000

Funds should ensure that any lost members with account balances under $6,000 on the relevant unclaimed money day (that is, 30 June or 31 December each year) are reported and paid to us as unclaimed super money by the lodgment due date.

Lost members over 65 years old

While the indicator improved to 65% this year, we would like to see some further improvement in the indicator. Where a member has attained 65 years old, and has had no contributions for two years and no contact for five years, funds are required to make reasonable efforts to contact the member. If funds are unable to contact the member, the benefit is required to be paid to us as unclaimed super money.

Timeliness of co-contribution and LISC remittance PVAs

There has been a decline in the percentage of funds meeting both of the timeliness of PVA indicators. Reporting and paying PVAs to us in a timely manner is important as it allows us to redirect a member’s entitlements to an active account held in another fund.

Supporting funds in 2018

During the 2018 calendar year, we engaged with our industry partners to implement event based reporting via the MAAS and the MATS.

Our engagement approach had a strong service focus, through our industry and consultative forums, one to one engagements and hyper care arrangements whilst funds on-boarded.

We also assisted funds by providing support with:

mergers and successor fund transfers
resolving voluntary disclosures
relationship management
assurance activities.

We conducted assurance activities when funds continued to fall outside benchmarks for some indicators, or had systemic issues across multiple reporting obligations.

We supported funds that were undertaking a merger or successor fund transfer with guidance and administrative support. This is because SFTs present a significant potential risk to the integrity of super fund data of fund members. We also assisted funds if they had a change in administrator or a change in information technology platforms.

We are currently working on further improvements to the successor fund transfer (SFT) protocol advice and guidance to assist funds through the member reporting aspects of this event. Funds are strongly encouraged to contact our client relationship (CRT) team for help and support by emailing us at SuperCRT@ato.gov.au

Funds were encouraged to use their RDF results to examine their systems and processes, and make voluntary disclosures of any reporting issues that were identified. We continued to work with funds to minimise adverse member reporting impacts. Funds can continue to send their voluntary disclosures to SuperCRT@ato.gov.au for actioning.

See also:

Making a voluntary disclosure

We met with 22 key clients during April–June 2019 to discuss their results and further understand their operating environment.

A webinar, 2018 Large Fund Diagnostic ReportExternal Link, was also recorded and released to discuss the 2018 RDF report and results and is available on the ATO website.

Future of the APRA Fund Diagnostic Report

Following the shift from an annual member contributions statement reporting system, and to event based reporting, it is important that we look at different ways to assist funds in meeting their member reporting obligations. This includes adapting how we communicate a funds’ member reporting performance back to them in a more timely manner.

We will continue to work with a specific purpose industry co-design group to progress the design of this new report.

Last modified: 17 Jul 2019QC 46621