Issue 556, 20 January 2015
In this issue:
- APRA reporting for select investment options
- Single Touch Payroll
- New life tables
APRA reporting for select investment options
APRA has finalised its data reporting requirements for ‘select investment options’ (SIOs) offered by registrable superannuation entities (RSEs). In broad terms, SIOs are non-MySuper investment options.
Following a consultation last year, APRA has now issued two final stand-alone reporting standards for SIOs, and revised two existing reporting standards to include data items related to SIOs. The new reporting requirements will involve the submission of quarterly information about investment performance, asset allocation and member flows, as well as structural information about these investment options.
Importantly, APRA has revised the quantitative threshold at which an investment option must be reported as an SIO. Under the proposed definition, an investment option with assets exceeding $50 million, or assets of less than $50 million but more than 5 per cent of total RSE assets, would have qualified as an SIO. Under the final definition, an option will be an SIO under the quantitative threshold if it has assets exceeding $200 million, or more than 5 per cent of total RSE assets.
The qualitative limbs of the SIO definition have also been adjusted, to exclude investment options underlying reserves or pre-MySuper default products which include accrued default amounts.
APRA has also decided to require only quarterly reporting of information relating to investment performance and asset allocation under the two new reporting standards, rather than quarterly and annual reporting.
In combination, APRA indicates that these changes will reduce the number of SIOs that the industry will report on by 50 per cent, while still ensuring that APRA receives information on a significant proportion (around 80 per cent) of superannuation industry assets.
The SIO reporting requirements will take effect as follows:
- The two stand-alone SIO standards, SRS 533.1 Asset Allocation and Members’ Benefit Flows (SRS 533.1) and SRS 702.1 Investment Performance (SRS 702.1), will take effect from 1 July 2015. APRA will grant transitional relief for 18 months to allow RSE licensees 35 calendar days to submit the data forms SRF 533.1 and SRF 702.1. From 1 January 2017, SRF 533.1 and SRF 702.1 will be due within 28 calendar days after the end of the relevant quarterly reporting period.
- Changes to the existing reporting standards, SRS 001.0 Profile and Structure (Baseline) and SRS 601.0 Profile and Structure (RSE) will take effect from 30 June 2015. Revised SRF 001.0 will be due for lodgement within 28 calendar days of 30 June 2015 (note that ad hoc lodgement of SRF 001.0 may be required in some instances). For RSEs with a year of income ending 30 June, revised SRF 601.0 will be due for lodgement within four months after 30 June 2015, and thereafter within three months of year end.
APRA’s response to the submissions it received on the SIO reporting proposals, and the new and revised reporting standards, forms and instructions, are on the APRA website.
Single Touch Payroll
On 28 December 2014, the Minister for Small Business, The Hon Bruce Bilson, and the Assistant Treasurer, the Hon Josh Frydenberg, announced that the government will cut red tape for employers by simplifying tax and superannuation reporting obligations through Single Touch Payroll.
Under Single Touch Payroll, which will be available from mid-2016, employers’ accounting software will automatically report payroll information to the Australian Taxation Office (ATO).
In addition, the Government will streamline tax file number declarations and choice of superannuation fund forms by providing digital services to simplify the process of bringing on new employees.
The ATO and the Treasury will consult with the community on the phasing of the start date for different sized employers and the arrangements to support the move to Single Touch Payroll. They will also consult on how the new arrangements will build on the SuperStream changes currently being implemented.
In addition, consultation will examine the potential for employers to remit Pay As You Go Withholding (PAYGW) and the Superannuation Guarantee at the same time employees are paid their salary and wages.
Part of the goal is to eliminate the need for employers to report employee-related PAYGW in their activity statements throughout the year and in employee payment summaries at the end of the year.
ASFA has written to the Assistant Treasurer congratulating him on the initiative.
New life tables
The Department of Human Services’ ‘Guide to Social Security’ was recently updated on 2 January 2015. As part of this update, a new Table of Life Expectancy is now in force for Centrelink benefit purposes, in relation to income stream payments commencing on or after 1 January 2015.
The Table of Life Expectancy is used to determine the relevant number (RN) for account-based income streams (also known as allocated pensions), market-linked income streams as well as lifetime, life expectancy or term income streams.
Funds need to reference this new table when providing information to members who are commencing these income streams on, or after, 1 January 2015.
