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Regulatory update: What to expect over the next 5 years (CMSF 7 September 2022)

Last updated 13 October 2022

Emma Rosenzweig, Deputy Commissioner, Superannuation and Employer Obligations

Speech delivered at the Conference of Major Super Funds (CMSF) on 7 September 2022 – Regulatory update: What to expect over the next 5 years

Good morning, everyone.

It’s a pleasure to be part of this session alongside APRA and ASIC as regulators in the superannuation sector.

Over the last few years, the ATO has played an integral role in supporting the community through a challenging period. We delivered vital stimulus to millions during the pandemic and proved we are much more than a regulator and revenue collection agency.

Our experience with stimulus showed us just how important our commitment to digital transformation is and how having access to the right data enables us to be agile in our delivery of large-scale programs as well as supporting our core business functions.

The Commissioner has recently launched our ATO Corporate Plan for 2022–23. Our vision is to be a leading tax, superannuation and registry administration known for our contemporary service, expertise and integrity. One of our most exciting and important areas of work is in our use of data and digital. Data underpins our client service, our early intervention activities and our goal of prevention rather than correction.

In my area of the ATO, Superannuation and Employer Obligations, systems like Single Touch Payroll and SuperStream reporting provide the key data sets that enable us to deliver on our vision. Today, I’d like to focus on these systems – specifically, event-based member reporting and what that looks like in a maturing operating system.

The superannuation industry has experienced significant change in the last decade. There has been a huge investment in time, effort and partnership to deliver systems and processes to comply with new reporting obligations.

These systems have facilitated on-time reporting through MAAS, for account information, and MATS, for contributions, with over 98% of events reported within the required timeframes. This has been a fantastic achievement by the super industry. 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 we want to see improving in a maturing system.

Accurate, complete, and timely data from funds, amongst other things:

  • Ensures the correct calculation of all the caps and taxes that we administer – contribution caps, concessional contribution carry forward, Div 293, and Total Super Balance.
  • Allows individuals to view an accurate superannuation position in ATO Online in respect of fund balances, contributions received, and available cap space.
  • Assists us to administer government policies such as the downsizer arrangement and the first home super saver scheme.
  • Assists us to reunite lost and unclaimed super money.
  • Supports the effective administration of superannuation guarantee compliance activities.

So, as you can see, there are a range of important tax and super outcomes that are dependent on your data. And event-based reporting allows the ATO to use the data in real time. 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.

As outlined in our corporate plan, a key deliverable for the ATO is to create a transparent view of employees’ superannuation guarantee in one place. We will do this by utilising what is reported to us from employers through STP, and the contribution data reported by funds via MATS. This program of work will bring us a step closer to more timely and proactive compliance action and towards a future where individuals won’t need to lodge employee notifications because we can in most instances automatically identify unpaid super by employers and take action. But again, the success of the program and our ability to pre-empt or detect non-compliance will only be as good as the data we hold.  

Given the criticality of member data to the operation of the super system it is imperative that trustees and the ATO have confidence in the data that is being reported. Therefore, we will be increasing our focus on improving the quality of member data reported to us and will pursue opportunities to work with funds and administrators leveraging our strong collaborative relationships. We will also be working closely with our colleagues in our Public Groups and International business line to engage with funds through their existing programs.

Through these engagements, we will look to gain an understanding of how trustees obtain confidence in the data reported to the ATO through their governance frameworks and the controls employed to mitigate the risk of incorrect reporting. We will take these learnings to identify the best practices and determine whether there is benefit in providing additional guidance to funds.

This work seeks to build on the extensive activities undertaken by industry and the ATO on strengthening tax governance and risk management particularly around third-party data, as well as the mechanisms we already have in place to support member reporting, such as our consultative forums, our client relationship manager program, guidance and support materials, and our ongoing communication through CRT alerts and super news.

Of course, we recognise there are many factors that contribute to an effective super operating system, which goes beyond the data funds report to us. That includes systems and services operated by the ATO and by third party service providers, as well as reporting from other sources, such as employers. However, an increased focus on governance controls and quality of fund reporting is where you can make a difference and will go a long way to ensure that individuals - your members - have a better experience with the tax and super systems.

I will leave my opening remarks there and end with an acknowledgment that as much as the ATO is aiming to improve our use of data to provide contemporary service to our clients, many of you have the same aspirations. And so, I hope that you can see that a focus on governance and data quality is of just as much value to your businesses and your members, as it is to the ATO.

Thank you.