Emma Rosenzweig Deputy Commissioner, Superannuation and Employer Obligations
Speech delivered to the Association of Superannuation Funds of Australia (ASFA)
(as part of parallel forum 1A) on 22 February 2023.
Good morning, everyone.
It’s a pleasure to be part of this session alongside APRA and ASIC as regulators in the superannuation sector. While there is always a lot happening in this space and therefore lots to talk about, today I thought I’d focus my opening comments on a few things that are at the forefront of my mind.
As Katrina and Danielle have already both mentioned, top of mind for us all is cyber security and fraud. The increasing scale and frequency of cybercriminal activity such as last year’s Optus and Medibank incidents is contributing to an increased risk of identity theft in Australia. This poses a real challenge for the super system and something we collectively need to focus on to protect the retirement savings of all Australians.
Through the Superannuation Industry Stewardship Group, which is a peak consultative group that I have the pleasure of co-chairing with David Knox, we have commissioned some important work to assist regulators and industry practitioners identify where new vulnerabilities in the system are presenting, and where there are opportunities to strengthen controls and how we collectively work together to implement greater security in the system for super members.
While the outcomes of that work will assist our cohesive industry response, it will no doubt require improvements of fraud prevention controls at a fund level and trustees should already be advancing work in this space given the risk it presents to their members.
Another key topic is of course, member reporting. Over the last five years there has been a huge investment by industry to deliver systems and processes to comply with new obligations. Timely reporting by funds through MAAS and MATS is providing real time visibility of transactions in the system.
Timely data however is only part of the picture – it is data quality and the level of confidence that trustees and the ATO have in that data, that is our current focus.
There are a range of important tax and super outcomes that are dependent on the data you report to us. So, where a fund reports an incorrect balance or an incorrect date, or fails to correctly remediate, the ATO may issue determinations or assessments in error or display incorrect balances on ATO online. This results in a poor experience for our clients – who are also your members - and undermines confidence in the super system.
Through the ATO's Public Groups and Internationals led review programs we are requesting information from trustees on what risk frameworks and governance controls they have over their member data and third-party administration. We are looking to understand what gives trustees confidence that the data they receive, store and re-use, is managed correctly and how they identify risks, remediate issues, and implement change.
Although early days, we are already seeing some great examples of Board endorsed frameworks and clear delineation of duties that demonstrate that trustees have processes in place to manage the receipt and reporting of high-volume transactions and to identify and escalate issues, where processes go wrong. We will take these learnings to identify the best practices and determine whether there is benefit in providing additional guidance to funds.
I’ll also note how important member reporting is for our Superannuation Guarantee compliance program. The work we do to identify an SG shortfall is informed by MATS contributions data reported by funds, and STP data reported to us by employers.
Right now we are undertaking some work to look at different ways to harness the benefits of MATS and STP data sets, to engage employers who are not complying with their SG obligations earlier, and closer to when the obligation was due. Timely and quality data is critical to the effective operation of the SG system and now more important than ever before.
I will leave my opening remarks there but very happy to take questions.
Speech delivered by Deputy Commissioner Emma Rosenzweig to the Association of Superannuation Funds of Australia (as part of parallel forum 1A) on 22 February 2023.