Emma Rosenzweig – Deputy Commissioner, Superannuation and Employer Obligations
Speech delivered to the Conference of Major Superannuation Funds (CMSF) as part of the Regulator Panel on 22 March 2023.
Good morning, everyone.
Thank you for having me along today with the other regulators in the super system. I think it's important that you see how the Australian Prudential Regulation Authority (APRA), Australian Securities & Investments Commission (ASIC) and Australian Taxation Office (ATO) work closely together to manage issues in the superannuation sector.
Firstly, I just wanted to note that we’ve heard from speakers earlier this morning about the importance of cyber security and you may have heard the 3 of us talk recently at the Association of Superannuation Funds of Australia (ASFA) conference about work we are doing in that space as well.
While cyber security risks to your fund are obviously critical to consider, even if you have not been subject to a cyber-attack it is important that you think about the risks posed to your fund of fraud that could be enabled by data breaches elsewhere.
The Superannuation Industry Stewardship Group, who are the ATO’s peak superannuation consultative forum, established a Fraud and Security Working Group late last year chaired by APRA. The group, which consists of regulators and industry practitioners, are working to identify where vulnerabilities in the system are presenting. Embedding effective fraud prevention controls at the fund level is the key to tackling this issue and I’m really confident that the group will identify opportunities to implement greater security in the system for your members.
At the last Conference of Major Superannuation Funds (CMSF) back in September, I talked about the importance of quality member reporting by funds, and at that time we were embarking on some new work, through our Public Groups and Internationals area. We are particularly interested in the governance frameworks and controls funds have over the huge amounts of member data they receive. The level of governance we see provides us with confidence that the data is being managed carefully and correctly.
Although the program is still in its infancy, what we are seeing is funds turning their minds to governance, their risk modelling and the change management processes they have in place. Some funds have already identified where they could make improvements that strengthen the controls and increase their capacity to identify mistakes. Other funds have demonstrated robust governance where there is a clear line of sight between administration of the data and awareness of any issues by their Board.
And while that is promising, we unfortunately still see examples where fund reporting issues are only identified when members complain that they have received assessments or determinations from the ATO incorrectly. So we know that diving deeper into the processes is allowing the ATO to consider what assistance industry might need in terms of best practice examples or further guidance, and we will continue this program of work throughout 2023.
The really big piece of work that we’re progressing this year is expanding the use of Single Touch Payroll (STP) data to address super guarantee (SG) non-compliance. The work we do to identify a SG shortfall is informed by STP data reported by employers to give us the SG liability, and member account transaction service (MATS) contributions data reported by funds that shows us what SG has actually been paid.
While we already utilise these data sets now, this priority initiative will deliver a technology uplift that will allow us to match the data more effectively and at a larger scale. By the end of this year we hope to have the new functionality deployed and will start testing the outcomes.
Timely and quality data from both funds and employers is critical to the effective operation of the SG system and is now more important than ever before. So, where we see anomalies in fund reporting or have low confidence in the data we are trying to match, we may engage with you.
Government and community have great expectations on the ATO in managing employers' compliance with their superannuation obligations. While around 94% of employers meet their obligations, the work we are doing to better utilise our data will help identify and support those remaining employers who might be getting off track, as well as more effectively target those employers who are repeatedly not doing the right thing.
And lastly, you may have seen that the ATO has recently published updated statistics on lost and unclaimed super. We commenced proactive super account consolidation in November 2019, and as of 30 June last year, the ATO has proactively consolidated almost 4.7 million accounts with a value of $7.1 billion dollars.
While we’re doing all we can to get this money back where it belongs, there is still $16 billion in lost and unclaimed super across Australia. That’s a lot of money. And, it’s an increase of $2.1 billion since last financial year.
Our new data also shows almost 1 in 4 (23%) Australians hold 2 or more super accounts, which can contribute to individuals forgetting about or losing super. Not to mention being at risk of paying more fees and charges.
Super funds play an important role in helping us reunite individuals with their super and reducing the number of multiple accounts. So please keep in contact with your members, remind them to update their details, and encourage them to check ATO online services so that some of this lost super may be found.
I will leave my opening remarks there but very happy to take questions.
Speech delivered by Deputy Commissioner Emma Rosenzweig at the CMSF on 22 March 2023.