In March and April this year, large super funds received a tailored diagnostic report assessing their performance in meeting their member reporting obligations to the ATO. This is the fourth year we’ve provided diagnostic reports to large super funds. As such we are able, for the first time, to provide a four year comparison of funds’ performance which adds another level of richness to the RDF process.
The results show that fund reporting obligations continue to be met to a high standard, despite a slight slippage in comparison to last year. These results play an important role in helping super funds understand how well they are meeting their reporting obligations relative to their industry peers and indicate reporting performance trends from year to year. The quality and timelines of reporting to the ATO has a significant impact on the experience of fund members.
Funds have been actively identifying member reporting errors and disclosing them voluntarily. We have moved from “detection” to a “self-correction” model of compliance. We encourage funds to continue to do this to improve the integrity of member reporting and ultimately provide a better experience for members.
Given the results from this year’s RDF, the ATO is confident there is strong, quantitative evidence that super funds’ member reporting obligations are being met to a good standard even in an environment of change. This gives us a strong basis of evidence to assume a level of ‘justified trust’ with funds. As a result, we do not see the need for audits or a large program of compliance work. However, we are undertaking a small number of Information System Risk Assessments (ISRA) and specific issue reviews with funds that have not met benchmarks over several years, or have systemic issues across multiple reporting obligations. We’d like to help them improve their systems and processes.
A high priority this year continues to support funds going through a merger or successor fund transfer (SFT). We have a special team to provide guidance and support for funds. SFTs present a significant risk to the integrity of the superannuation fund member data. The failure consequences are high and have the potential to impact on a high number of fund members should an SFT (or associated transfer of data) cause issues with data quality. We have also been working on updating the Involuntary Superannuation Account Transfer (ISAT) protocol to provide guidance in relation to the new event-based reporting obligations.
Between April and June this year, we met with key client funds to discuss their results and readiness to implement ongoing reforms. In addition to implementing the 2016 and 2017 budget changes we are also well on the way to implementing 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 service in conjunction with the MAAS replaces the current Member Contributions Statement (MCS).
Also, the last year saw funds transition to reporting and paying their unclaimed money accounts to the ATO using the industry standard rollover message replacing the unclaimed superannuation money (USM) statement. This has progressed smoothly with most funds having completed their April 2018 lodgment using the new channel. There has been an incredible amount of work over the past year from within the superannuation industry and the ATO to prepare and implement these changes. Our close working relationship with industry has been pivotal to the best possible administrative design and to date we have seen a smooth transition.
With funds lodging their last MCS by the end of October 2018, we intend to produce a diagnostic report for 2018 using the existing model with minimal changes. However with the change to event-based reporting, we are redesigning the RDF and working towards providing a new assurance report that will help funds assess their performance under the new reporting standards. We would like the new report to assist in a more timely identification and resolution of reporting issues in line with the more frequent reporting of data.
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, please let the RDF redesign team know by emailing the LargeFundDiagnostic@ato.gov.au.
