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  • Large super funds are meeting their member reporting obligations

    We have published our annual large super fund industry report summarising the outcomes from the 2017 Risk Differentiation Framework (RDF) on super member reporting obligations of large APRA regulated funds.

    Specific results were provided in tailored diagnostic reports delivered to the funds and some key external administrators in April this year.

    Diagnostic reports

    The tailored diagnostic report assesses funds' performance in meeting member reporting obligations to us. This is the fourth year we have provided these reports to funds and as a result, for the first time we have been able to provide a medium-term comparison of reporting performances.

    Using a similar model, this is the second year we have delivered tailored diagnostic reports to some key external administrators providing them an overall picture of how well they have performed in their reporting for the funds they administer.

    This report gives us a wider coverage and assists administrators in identifying potential systemic or procedural issues.

    RDF results

    Given the results from this year’s RDF, we are confident there is strong, quantitative evidence that funds continue to meet their member reporting obligations to a good standard, even in an environment of change.

    Based on the positive trend over the past four years, we have established a level of ‘justified trust’ with the industry in general and as a result, we do not see the need for audits or a large program of compliance work.

    The RDF results drive our engagement focus where it is most needed. For instance, we are conducting Information Systems Risk Assessments (ISRA) and specific issue reviews with some funds that have not met benchmarks or may have systemic issues, and we’d like to help them improve their systems and processes for better reporting outcomes.

    Self-correction model

    Since we moved from a 'detection' to a 'self-correction model', funds have been actively identifying member reporting errors and disclosing them voluntarily. We encourage funds to continue this to improve the integrity of reporting and provide a better experience for members.

    MAAS and MATS

    We have started implementing the 2016 and 2017 budget changes, and also the new contemporary reporting framework.

    This framework introduces two event-based services referred to as the Member Account Attribute Service (MAAS) and the Member Account Transaction Service (MATS). The MATS in conjunction with the MAAS replaces the current member contributions statements (MCS), which funds will lodge for the last time in October 2018.

    Lost member reporting will also be done through MAAS by 31 October 2018. Funds must report lost members at least once every six months or they may choose to report more regularly.

    Last year we saw funds transition to reporting and paying their unclaimed money accounts to us using the industry standard rollover message, which replaced the unclaimed superannuation money (USM) statement. This has progressed smoothly with most funds having completed their April 2018 lodgment using the new channel.

    We recently met with key client funds to discuss their RDF results and readiness to implement these ongoing reforms. It is pleasing to see the high level of engagement from funds and the spirit of partnership. Together with industry we have worked hard to get ready to implement these changes.

    Fund support

    We continue to support funds going through a merger or successor fund transfer (SFT). We have a special team that provides guidance and support for any fund requesting it. SFT’s present a significant risk to the integrity of the superannuation fund data.

    The failure consequences are extreme and have the potential to impact on a high number of fund members should an SFT (or associated transfer of data) fail. We have also been working on updating the Involuntary Superannuation Account Transfer (ISAT) protocol to provide guidance about the new event-based reporting obligations.

    Going forward

    We intend to produce a last diagnostic report using the existing RDF model for 2018, as funds lodge their final MCS in October 2018. However, with the change to event-based reporting, we are redesigning the RDF and assessing its current form. We aim to continue providing funds with a relevant and contemporary report to help them assess their performance under the new reporting standards.

    Our goal is to provide timely and meaningful data to identify and resolve reporting issues more quickly.

    Next step:

    • We will be consulting with the industry to obtain valuable feedback for consideration in the new model and report. If you would like to participate in the consultation email LargeFundDiagnostic@ato.gov.au.

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      Last modified: 08 Aug 2018QC 56418