Superannuation Reporting Transformation Initiative

Transcription

1 Attachment A Superannuation Reporting Transformation Initiative The Future of Super Reporting Improving member visibility of their total super holdings through creation of event-based reporting by APRA funds Version: FINAL Date: 30 June 2017 EXTERNAL [UNCLASSIFIED]

2 EXTERNAL [UNCLASSIFIED] Table of Contents 1. Executive Summary 2. Strategic Context 2.1. Anticipated Outcomes 2.2. Design Principles 3. Proposed Solution 3.1. Scope 3.2. Out of Scope 4. Benefits 4.1. Member Experience 4.2. Fund Experience 4.3. ATO/Government Experience 5. Cost Analysis 6. Risks

3 EXTERNAL [UNCLASSIFIED] 1. Executive Summary 1. (ATO) has led the planning and implementation of SuperStream as part of the Government s 2011 Super Reform Program. SuperStream introduced a data and payment standard to drive more automated and timely processing of employee transactions and to improve the member, employer and fund experience and their 7. In addition, the last Federal budget cycle (2017) has shown the importance of having a standardised, contemporary reporting framework that can easily be adapted to support future new policy change. 8. Initial in principle support was sought from key stakeholders in the Industry to progress the design of this strategic reporting solution. 2. The active support of industry for these initiatives was pivotal. This support and a recognition of the importance of the reform resulted in industry co-funding SuperStream in With this industry engagement a digital standard was designed to improve 4. new support and enabling services for industry and fund members along with a series of staged technological implementations over the last four years. Importantly, it was also designed to simplify processes for consolidation of accounts and reduce the number of multiple accounts held by members. The final stage of the SuperStream program is the transformation of Business to Government (B2G) reporting. 5. In late 2016, as Industry and ATO was about to embark on build and test components of this last phase of SuperStream implementation, a review of the current environment 6. reporting framework. purpose in light of the impact to Industry of Single Touch Payroll (STP) reporting requirements and new ATO reporting requirements relating to super reforms announced in the 2016 Federal Budget. 9. This redesign is an opportunity to align designs and build on existing technological known requirements. An enduring solution will be more capable of absorbing future policy changes rather than addressing changes separately and potentially requiring 10. It is jointly recognised by ATO and the Superannuation industry that this design will deliver the necessary components required to operate in the current digital environment 11. reporting platform the Superannuation industry will be better placed to support future This document outlines the reporting transformation to shift APRA fund reporting to a transactional, event-based reporting framework from the current aggregated annualised reporting arrangements. This transformation will be delivered by two new services referred to as member accounts attributes service (MAAS) and member accounts transaction service (MATS). 12. This document has been developed in conjunction with key Industry representatives and has the support of: a. with responsibility for addressing strategic issues relating to SuperStream; b. The ASP Services Committee; and c. The Australian Institute of Superannuation Trustees Superannuation Reporting Transformation Initiatve 3

4 EXTERNAL EXTERNAL [UNCLASSIFIED] 2. Strategic Context 13. This design is a conscious shift away from annual reporting to more frequent reporting of member data. 14. It is expected that the redesign will move to a more contemporary platform and: a. bring the current annual reporting regime ito more real time community and government expectations in terms of client centric design and service delivery. This will meet a growing desire for the ATO to provide the member with more up to date information providing a view across all super holdings which is not possible in the current annualised reporting regime; b. decrease the likelihood of additional reporting outside of the SuperStream changes being imposed on funds (additional time and costs) to meet new reporting requirements relating to superannuation reforms announced in the 2016 Federal Budget; c. support operating in a digital environment to better support future policy solutions outside of the SuperStream reporting services; d. provide the ATO with a much richer and more accurate pool of data from funds gained through more frequent contributions reporting that would assist with better visibility of superannuation guarantee (SG) payments and allow the ATO to better monitor and assess SG compliance; and e. provide more certainty for individuals regarding SG contributions actually allocated to their super account than they would have been able to get through the original STP design. 15. In response to the changed environment, the ATO commenced a co-design process with a cross section of Industry participants to develop a proposed integrated strategic reporting solution that would: a. b. reset the frame around transactional level reporting, moving away from the traditional cyclical reports; c. replace the interim tactical solution that was developed to meet the requirements for the 2016 budget measures for APRA funds; d. recognise the need to align reporting requirements in support of 2016 budget measures, Single Touch Payroll and member contribution information; and 16. The new reporting solution will replace the short-term tactical solution, referred to as TBAR that was developed to provide a timely solution to reporting requirements following the Budget 2016 measures. The TBAR was developed to minimise any adverse impact to members resulting from delayed reporting to the ATO while allowing adequate time to properly design and implement a long term solution Anticipated Outcomes 17. The data provided through the new reporting solution will directly impact a range of include SuperStream, the 2016 Superannuation Budget measures, SG contribution control including SG compliance and to be better able to inform individuals across a range of superannuation products. SuperStream (original super reform program) 18. The new fund reporting solution will align to the SuperStream Standard which will remove unnecessary reporting and ensure more streamlined interactions between Industry and the ATO. This meets the original program intent to modernise the processing of superannuation fund member transactions to make them easier, cheaper and faster and at the same time to improve the member, employer and superannuation new reporting solution will complete the range of initiatives under the Government s original Super Reform Program that commenced in Superannuation Budget measures 19. The new reporting solution will provide the ATO with the data it requires to administer the 2016 Superannuation budget measures. The ATO will be able to undertake proactive messaging to individuals to prevent cap breaches and allow members to fully utilise caps including the development of new interactive tools and to super. 20. The ATO will be able to provide members greater visibility of their accounts across multiple funds including their super contribution history, unused cap amount, account balances and total super balance. This will allow individuals to monitor their balances for cap purposes during the contribution year and to make more informed decisions in regard to their super holdings. e. build a longer term solution that can absorb future policy change, while Superannuation Reporting Transformation Initiatve 4

5 EXTERNAL [UNCLASSIFIED] 21. Excess contributions determinations can be issued much sooner for many clients. Early income tax return lodgers will receive greater certainty regarding their tax position sooner and can also reduce costs associated with exceeding caps; a. excess concessional contributions determinations will be included on the original assessment, instead of after peak MCS lodgement b. division 293 clients that are early lodgers will also receive their determinations much sooner c. earnings amount as determination is made much sooner. Single Touch Payroll 22. The new reporting solution will provide the ATO with event-based transactional data including SG payment reporting. While this is currently an employer obligation under STP it is considered that obtaining this information from super funds rather than employers as part of the new reporting requirements will provide a more robust outcome for the member as the reporting will be based on when money has been allocated to a members account. This information will better enable the ATO to undertake preventative action and faster reactions to potential non-compliance by employers. 23. Due to the progress achieved with the redesign it is expected that the STP Program will shortly communicate to industry stakeholders that substantial employers will not be required to provide superannuation contribution payment reporting to the Commissioner from 1 July Increased visibility of SG contributions as they are allocated to a member s account will allow the ATO to: a. improve ATO data analytics to identify patterns of non-compliance and b. provide employers with timely, tailored engagement, education and assistance to support them in meeting their obligations. Contemporary communication approaches such as SMS, pop-up messages, mygov alerts, automated letters, or phone call can be used with a greater understanding of the employer s circumstances. c. non-payment circumstances. This can occur without the fund member needing to check their account or lodge a complaint about their employer not paying the superannuation guarantee. d. provide members with more timely and complete information about their total superannuation entitlements through visibility of payments being made across all their super funds including when a member has multiple funds. e. determine with greater accuracy if correct SG contributions are being made when fund information is combined with payroll event reporting delivered by STP. 29. Timely data on employer contributions allows the ATO to make a better informed assessment of an employer s compliance risk and apply the appropriate treatments. The ATO can apply low cost options to engage with employers earlier and more appropriately target its audit resources to the highest risk employers. 30. will enable interactions such as reminders or nudge communications encouraging 24. The new reporting solution will provide the ATO with detailed member and transaction data and will create the opportunity to distil insights from data at a system and individual level. 25. The reporting will provide the ATO with visibility of the employer making the contribution, the fund member receiving the contribution, when it was made and what type of contribution it was, all within a short time of the contribution being allocated by the super fund. 26. Through the use of sophisticated data-matching techniques and analytical models the visibility of this data will lead to earlier detection of non-compliance and mean improved targeted ATO assurance activities and earlier interaction with employers who do not pay their SG payments to super funds on time. 27. Activities the ATO will be able to undertake will ultimately result in earlier detection of non-compliance leading to SG being paid to members accounts earlier which will in turn result in improved retirement outcomes for members. issues worsen impacting the viability of their business. 31. It will also support earlier ATO audit and debt collection actions with high risk employers who are disengaging from the superannuation guarantee system and routinely failing to meet their obligations. This will result in increased collections to secure employee s superannuation guarantee entitlements. Technical guidance 32. The ATO receives a range of information from third parties for the purposes of supporting taxpayers by providing them with more timely information which allows them to make informed decisions and enhances voluntary compliance in the taxation system. The current timing of reporting of superannuation information from funds means that in the area of superannuation the ATO can only perform post issue compliance, and there are limited discretions in the Superannuation regime that allow the Commissioners to support individuals to rectify the issues without penalty. 33. Event based reporting from the Superannuation industry will allow the ATO to better support taxpayers contacting the ATO with questions relating to their current tax and superannuation position. Superannuation Reporting Transformation Initiatve 5

6 EXTERNAL [UNCLASSIFIED] 2.2. Design Principles 34. As part of the initial Industry consultation to develop a new reporting framework for APRA funds the following design principles were developed to underpin the proposed solution: a. Provide a greater overview of superannuation for a member in a more frequent manner; b. Design for the best outcome, not for legacy systems, put existing systems design aside. Focus on delivering electronic solutions digital by default where possible assess this against the cost of implementing the solution to c. Tell us once collect data and share across the agencies to reduce duplicate to do so; d. Leverage on SuperStream message patterns and reuse where possible; e. government policy requirements to reduce the cost of the build; f. Integrate the design with other changes, to reduce the need for additional unique builds, i.e. Super Reform/Single Touch Payroll; g. and use of the granular data collected, including the frequency requirements; h. Design to allow corrections and amendments to data, single or batch; i. Don t over-engineer the design keep it simple; and j. Separate implementation issues from the design process. 3. Proposed Solution 35. The original reporting solution under the SuperStream program commenced in collaboration with Industry in The work at that stage was limited to member contribution statement (MCS) and lost member reporting and focussed on removing obsolete reporting and digitising transactions by building on the SuperStream messaging already in operation. Based on the environment at the time, the design work concluded that the APRA Fund reporting would be broken into two streams: iii) iv) Data received by the ATO through the MAAS service will provide up to date information and allow the ATO to display accounts in a timely manner as well as to improve its interaction with funds with an extended cutover period through to October a. the Member Information exchange (MiX) which was designed to create a service similar to SuperTick that allowed industry and the ATO to exchange information about the member on an event basis. This design recognised was based on providing the information only when it changed and removing the annual obligation. b. The second part of this design recognised that the remainder of the MCS the aggregated contribution data and account balance information could remain on an annual cycle, albeit, aligned to the data and payment standard this was referred to as MiX MCS. 36. The new proposed reporting solution for APRA funds member reporting essentially takes the initial solution one sep further and splits the current MCS into two eventbased services: a. The Member Account Attribute Service (MAAS) is the service for funds to report changes to a members account attribute when it occurs (formerly referred to as MiX). i) It was recognised that much of the attribute information reported via the MCS does not change year on year so moving to reporting the information only when it changes will, over the longer term, ii) members. This service removes the need to re-report unchanged information annually on the MCS and instead funds will only be required to report changes when they occur. This means that if there is no change to a members account attributes then there is no obligation to report for the ATO and Industry due to aged or incorrect data. b. The Member Account Transaction Service (MATS) is the second service and the subject of this document. The MATS service will be for the reporting of member information at a transactional and event-based level. i) The full detail of the MATS design is described in the MATS Contextual Solution Summary. The detailed design of MATS will commence in July 2017 and will be deployed during ii) The ATO will be ready to deploy into production from July There will be an extended cutover period with phased implementation dates for funds. iii) The cutover period and implementation dates will be developed during the detailed design process. It is anticipated that funds will commence on-boarding from November 2018 and that a catch-up process will be developed in partnership with Industry as part of the transitional year approach. 37. The ATO will ensure that the transitional approach for the MATS service is developed in conjunction with Industry. As this event-based contribution reporting service replaces a range of current reporting obligations it is important that a pragmatic approach is taken to both the initial on-boarding process to the new service as well as the catch up process to ensure that funds continue to meet their reporting obligations. 38. A tactical solution, TBAR, has also been developed so that super funds can meet the mandatory reporting requirements from the 2016 Superannuation Budget measures from 1 July While not in the SuperStream standard this is a temporary arrangement that will be replaced by an enduring solution as part of the combined MAAS and MATS service. Superannuation Reporting Transformation Initiatve 6

7 EXTERNAL [UNCLASSIFIED] 3.1 Scope 39. The scope of the MATS service includes member data reported at an event/ transactional level as opposed to the current method which has contribution information aggregated into yearly amounts reported under broader contribution categories on an annual basis. Reporting of data required under MATS will be through SuperStream messaging. 40. MATS incorporates member contribution reporting as well as additional reporting required for income stream accounts in retirement phase under the Transfer Balance Cap requirements. The event or transactional reporting will include: 41. a. contributions received which will be reported at a more granular level and at the individual employer level b. 30 June account balance c. Transfer Balance Cap for retirement phase and accumulation phase accounts replacing traditional unique reporting for lost members, member contribution information and the new retirement phase reporting as well generating some of our ATO proactive activities. For example MAAS generates all TFN validations and Section acknowledgement of Div 293 deferred debt accounts and utilising the service where members are not yet lost to obtain up to date details from the ATO. Together these services provide a sophisticated and integrated reporting solution. 3.2 Out of Scope 42. The following elements are outside the scope of the MATS: a. SMSF Reporting While not currently in scope, the ATO intends to consult with SMSFs with a view to developing solutions to assist them to move to more regular reporting in the medium term, recognising that SMSFs and their advisers will need considerable support to transition to more regular reporting over a suitable period of time. b. more frequent contributions reporting is not appropriate. c. Reporting of rollovers to the ATO is out of scope in the current high level MATS design. The design will allow for rollovers to be included in the future if there is an agreed requirement for this information to be reported. d. Harmonising Release Authorities there is still a preference to digitise release authority style interactions (including commutation authorities) however a design activity will be undertaken through a separate consultation process. e. MyGov display design The mygov component is broader than this project (and therefore out of scope) however it is key to improving the client experience holistically and will be managed as an integrated but separate piece of work across the ATO. 43. The ATO acknowledges feedback from Industry on the importance of the mygov display design and the impact this will have on members. The ATO commits to working with Industry on the design of the mygov display to ensure that the availability and display of information for members deliver the benefits that this document articulates. 44. Further information and detail on what transactions are required to be reported through the MATS service on either an annual or event basis and what has been determined as out of scope can be found in the MATS Contextual Solution Summary document. Superannuation Reporting Transformation Initiatve 7

8 EXTERNAL [UNCLASSIFIED] 45. Moving from annual reporting to event based reporting will deliver many a member s long term retirement investment. By leveraging on the SuperStream asset, already used widely across the superannuation system, this design will help to deliver a durable and sustainable reporting solution able to withstand future policy change. 46. The changes to APRA fund reporting will support a stronger, more transparent and integrity based superannuation system to protect and grow Australia s $2.2 trillion superannuation asset. 47. The ATO will hold a more information on superannuation transactions and will be able to undertake a range of new or increased activities in relation to the operation in Australia s superannuation system that supports a member through to their retirement. 4.1 Member experience 48. payments that they are entitled to. This will be due to the increased availability of information in the system regarding SG transactions made to their accounts and new activities the ATO will be able to undertake in relation to SG compliance. 49. Members will have increased visibility and control and be able to access up to date superannuation account information across all their accounts. This will enable them to: a. More actively engage in the superannuation system with both the ATO and funds; b. Know when they are at risk of breaching contribution caps or identify opportunities to increase contributions as they will have visibility to view themselves; c. d. Can better make informed decisions about their super holdings using up to date and improved information including ability to consolidate super holdings. 4.2 Fund experience 50. The new reporting solution will mean that reporting requirements are managed in a consistent and automated way using the existing SuperStream messaging format. The solution will also better accommodate future reporting requirements. cost savings for funds than through developing separate stand-alone solutions. 51. The experience for funds can include: a. Reporting updates to a members account at the time of change, removing unnecessary reporting and ensuring more streamlined interactions with the ATO; b. Greater engagement of members with their super holdings through c. A reduction in costs associated with pursuing employer late payments due to the ATO s future monitoring and targeted assurance activities aimed at employers who do not pay to super funds on time. d. Universal transparency and accuracy promotes good client experience and a member through to their retirement. 4.3 ATO/Government experience 52. superannuation system. 53. A more granular level of data being reported more regularly means the ATO can better support the superannuation system and can distil insights from data at a system and individual level. This will give the ATO a fuller picture of employees and employers from both a superannuation and taxation perspective and will ultimately 54. to undertake are described in the outcomes section of this document. 5. Cost analysis framework it is recognised that there will be additional costs for super funds. 55. It is important to recognise though that through the existing SuperStream program of work the Super industry was already committed to a change to APRA fund reporting and at the beginning of 2017 was ready to commence the design and build of a new reporting service which would have had its own build and ongoing operating costs. 56. This new proposed solution takes the previous design a step further and increases the frequency of transactions to be reported. This document sets out that change. 57. It is also recognised that while event-based transactional reporting of SG contribution payments was an employer obligation in the STP design many super funds and intermediaries would still have needed to support employers to meet their obligations related to SG payment reporting. 58. While we recognise the increase of investment costs for APRA funds there are a a. Removal of a number of existing project based reporting requirements and b. c. d. total superannuation position and can ensure that their employer is meeting their SG payment obligations; the overall integrity of the superannuation system. Superannuation Reporting Transformation Initiatve 8

9 EXTERNAL [UNCLASSIFIED] 6. Risks 60. Key risks and mitigation activities associated with this project that are being actively monitored include: Risks The scope and intent of the change is not clear. The end design does not deliver the intended outcomes. Mitigation The document is to have a clear vision and pragmatic assessment of the change. The core design team (CDT) consists of a representative cross section of the Industry. The scope of the change and outcomes are clear to the CDT. The build and test phase does not meet the design requirements. All stakeholders are able to meet the prescribed implementation and compliance dates. Governance arrangements are clear to stakeholders. ATO systems cannot support the volume of transactions. Members do not access new services at satisfactory levels. Further regulatory change impacts ability of providers to meet deadlines. The superannuation element of the mygov display creates confusion for fund members The cost of MATS outweighs the value Suitable testing environment/process available. A detailed program of work to be developed through to June Transition and compliance dates are clear. Timeframes are consulted upon with the stakeholders. All arrangements and roles are documented and shared. Consultation, escalation and resolution pathways are clear. Undertake detailed business volumetric analysis and assessment proposed solution is against current and planned infrastructure for expected super related volumes. Ensure that ATO infrastructure allows for high availability and network connectivity between applications that are hosted in the best option cloud and on-premises Mitigation infrastructure to achieve desired outcomes shift between in event of outage/issue. Improve design and ease of use of mygov. Transparent well planned future roadmap and early engagement with industry if and when change arises. Detailed design phase of MyGov to be undertaken in partnership with industry representatives. Partnership with industry to develop the high level design concept. Continued partnership with industry to work through the detailed elements of the MATS design to ensure that we Superannuation Reporting Transformation Initiatve 9

10 EXTERNAL [UNCLASSIFIED]

11 Member Account Transaction Service - Timeline Intent: To show indicative dates for co-design activities as we move into detailed design. The design work will cover system architecture as well as reporting events and reporting timeframes. To outline the consultation activity including the key forums and other communication avenues to share the design more broadly. To provide dates to support when the technical documentation will be provided together with other activities to support the design process. [UNCLASSIFIED] Attachment B Project Planning The TSWG is the primary consultative group used to develop the Solution Summary. This group is tasked with developing the high level solution that includes determining the reporting events, the timeframe for reporting and how the system will manage amendments. The TSWG will also continue to identify and remedy design issues and improve the overall capture of required data to satisfy the transactional level of information needed. They will also develop the strategy for implementation through the cutover period. Week Commencing 10 July Week Commencing 17 July Week Commencing 24 July Week Commencing 31 July Week Commencing 7 August Week Commencing 14 August Week Commencing 21 August Week Commencing 28 August September Detailed Design System Architecture Data Quality and gaps Technical Documentation Transition Planning Transaction Service Working Group 14/7 Project Plan 17/7 Transaction Service Working Group 28/7 Communications Strategy 24/7 Solution Summary 31/7 Scenario Development 10/8 Transaction Service Working Group 14/8 The process to test and on-board trustees during the extended implementation period will be managed and scheduled as part of the TSWG. The dates will be in the 2018 year and not easily called out in this schedule. Transaction Service Working Group 4/9 Draft Business Implementation Guide 7/9 Draft Technical Specification 7/9 Published Build Technical Specification 28/9 Communication External consultation Internal consultation Superannuation Executive Group 11/6 Program Change Board 13/7 ASP Management Committee 18/7 STP Advisory Group 20/7 Gatway Operator Meeting 20/7 ASP Management Committee 1/8 SuperStream Refernce Group 9/8 Industry Article 24/7 AIST Board 31/7 MATS Webinar 10/8 ASP Management Committee 15/8 STP Advisory Group 22/8 ASFA Services Committee 21/8 ASP Management Committee 29/8 Industry Engagement Forum 29/8 Super Executive Meeting 12/9 ASFA Services Committee 25/9 Broadcast and targeted stakeholder communications about business reporting transformation initiative, including MAAS and MATS services Individual Display The client experience with our online service will be managed as an integrated but distinct piece of work. This work will include identifying the data to be displayed across all areas of the ATO with the intent of ensuring the client has the right information at the right time. Benchmarking The ATO will be undertaking some data analysis work with the intent of establishing some reporting benchmarking to support measuring the effectiveness of the change. This will include the metrics to capture volumes against cost/effort both pre and post implementation.

12 APRA fund superannuation reporting transformation Frequently asked questions (Attachment C) UNCLASSIFIED EXTERNAL

13 Contents What is the APRA fund superannuation reporting transformation? 3 What is the Member Account Attribute Service (MAAS)? 3 What is the Member Account Transaction Service (MATS)? 4 Where is the ATO up to with the development of MATS? 4 What will MAAS/MATS look like? 5 How will funds and members benefit from the superannuation reporting transformation and the new services MAAS and MATS? 5 What will be the cost to funds of implementing the superannuation reporting transformation, including MAAS and MATS? 6 How have you engaged funds to ensure the superannuation reporting transformation and MAAS and MATS are fit for purpose? 6 What are the timeframes for MAAS and MATS deployment? 7 How confident is the ATO in the MATS design? 7 What options are available for the phased implementation of MAAS and MATS? 7 How does the superannuation reporting transformation fit with the SuperStream roadmap? 8 How will the superannuation reporting transformation affect government reporting of super guarantee contributions under Single Touch Payroll? 8 How will taking on the responsibility for reporting employer super guarantee contributions affect funds? 8 How does the APRA fund superannuation reporting transformation affect Single Touch Payroll? 9 UNCLASSIFIED EXTERNAL 2

14 What is the APRA fund superannuation reporting transformation? The APRA fund superannuation reporting transformation is a fundamental redesign of large super fund reporting, which will provide a range of benefits for individual members, large funds and the ATO. The redesign will shift the current annual, aggregated reporting framework to transactional, event-based reporting. This redesign will provide the ATO with access to more frequent high-quality data at a system and individual level to ensure that the superannuation system is administered in line with government and community expectations. The intent of the changes is to prevent significant inefficiencies, duplication and costs for the ATO and APRA funds. At the same time it will improve transparency of the superannuation system and members ability to make informed decisions in relation to their overall superannuation holdings. This new way of reporting will directly support a range of ATO programs of work including SuperStream, the 2016 superannuation Budget measures and Superannuation Guarantee contribution payment reporting requirements under Single Touch Payroll (STP). The redesign will be delivered through two new event-based reporting services. These services are referred to as the Member Account Attribute Service (MAAS) and the Member Account Transaction Service (MATS). These two new services will replace traditional unique reports that large funds are currently required to do for lost members, contributions and the new retirement phase reporting following the Budget 2016 superannuation changes. What is the Member Account Attribute Service (MAAS)? MAAS is the new name for what was previously referred to as the Member information exchange (MiX) web service. While we ve changed the name to more accurately reflect the function of the new reporting-to-government framework, the design is the same. This service is for funds to report changes to a member s account when they occur. These changes can include: when an account is opened or closed the phase of the account (accumulation or retirement) what indicators are linked to the account (for example, whether insurance cover is attached to the account) what transactions accounts can receive (for example, whether an account can receive co-contribution and LISTO payments from the ATO). This service is also used to report lost members and the ATO will return ATO-held contact details. There is also an optional build that will allow trustees to request ATO-held contact details on-demand. UNCLASSIFIED EXTERNAL 3

15 What is the Member Account Transaction Service (MATS)? This new reporting solution allows for more frequent, event-based fund reporting of member data to the ATO, including contributions. It will give members more up-to-date information about their superannuation so they can make more informed decisions. It will also provide us with the information to support changes to the system now and in the future. While we ve made excellent progress with the design of the MATS, some aspects may change as we continue to consult with funds. Where is the ATO up to with the development of MATS? The current review of fund reporting and the MCS redesign is the final stage of the original SuperStream program, which began in In late 2016 a review of the current environment by industry and the ATO identified a number of superannuation-related changes that questioned whether the original proposed reporting redesign was a contemporary solution that would meet the future needs of both industry and government. Since late 2016 we have been working very closely with industry in a co-design process to come up with a new reporting approach. This approach is intended to: better support the convergence of super-related changes provide better outcomes for the overall super system and government policy direction, and improve the member experience by making it easier to view balances and engage in the super system. We re still considering design options for more regular contributions reporting and other member data, but we refer to the draft design as MATS. This will ultimately replace the interim Transfer Balance Account Report (TBAR) for APRA-regulated funds. In our draft design for MATS, we are also working on our transition approach to moving APRA-regulated funds into the new reporting framework. This transition approach is being co-designed with industry. While we are still working through the detail of this approach, our expectation is that the ATO will be ready to receive MATS transactions from 1 July 2018 and we are planning for an extended industry cut over period through the income year. The ATO has confidence in the intent and design concepts developed in partnership with industry, and this has now received support from a range of industry stakeholders. After receiving valuable feedback from industry, we ve now developed a statement of intent (Attachment A) that clearly articulates the benefits and outcomes the changes will deliver. UNCLASSIFIED EXTERNAL 4

16 What will MAAS/MATS look like? We are redesigning the way APRA-regulated super funds report to the ATO about member attributes and transactions. This work is driven by factors such as the new requirements arising from the 2016 and 2017 Budget changes and the need for greater visibility of super guarantee payments. This new framework will introduce a conscious shift away from annual reporting to more frequent event-based reporting of member data. It will offer a range of benefits for both funds and members, including greater visibility for members and the ATO about contributions (including super guarantee) as well as the attributes of members and their accounts. We published the draft MAAS technical documentation in April 2017 and have now worked through industry feedback and published the updated documentation on 7 August Having made the decision in August 2017 to proceed with the MATS, we will work with industry on the detailed design and expect to make the services available for industry to test from 1 July How will funds and members benefit from the superannuation reporting transformation and the new services MAAS and MATS? The shift to event-based reporting is expected to deliver efficiencies and benefits across the superannuation system. Fund members will be the key beneficiaries with better access to their superannuation information, including their contribution history, unused cap amount, account balances and total super balance. This will allow individuals to monitor their balances for cap purposes, make informed decisions, and be more actively engaged with their super. It will also allow the ATO to be more targeted and effective in its efforts to ensure a member receives their super guarantee entitlements. Access to data through the new reporting solution will allow the ATO to provide members with correspondence that covers all super products and enable the ATO to respond to member enquiries about super holdings and cap balances. For funds, the redesign is an opportunity to align designs and build a longer-term solution capable of absorbing future policy change while leveraging off the SuperStream investment. The new fund reporting through MAAS and MATS means that funds can report updates to a member s account at the time of change, removing unnecessary reporting and ensuring more streamlined interactions with the ATO. These services also replace a number of current reporting obligations. The ATO will monitor and undertake targeted assurance activities with employers who do not make payments to super funds on time. Universal transparency and accuracy promotes a good client experience and builds trust and confidence in the system. UNCLASSIFIED EXTERNAL 5

17 What will be the cost to funds of implementing the superannuation reporting transformation, including MAAS and MATS? While it is difficult to estimate the actual cost of the new reporting framework it is recognised there will be additional costs for funds. It is important to recognise that from the existing SuperStream program of work the industry was already committed to design and build a new reporting service by the start of This system would have had its own build and ongoing maintenance costs. The proposed solution takes the previous design a step further by increasing the frequency of transactions to be reported. The intent statement (Attachment A) sets out that change. While we acknowledge the cost increase for APRA-regulated funds, there are a number of direct and indirect benefits and cost savings that can offset these costs, including: the removal of a number of existing reporting requirements and cycles for the annual Member Contributions Statement and specific reporting for lost members better visibility of member s super and assurance that their employer is meeting their super guarantee payment obligations improved capacity for the ATO to monitor and notify members when they are approaching the contribution cap, reducing the number of release authorities that funds need to action the increased flow of super guarantee payments significant improvement in system integrity. How have you engaged funds to ensure the superannuation reporting transformation and MAAS and MATS are fit for purpose? The super industry recognised that the initial reporting changes being progressed as part of SuperStream were not going to achieve the best outcome and that there was an opportunity to revisit the proposed reporting changes to see how we could get a better design to meet the emerging super-related requirements (like Single Touch Payroll and 2016 Budget measures). We established a working group with representatives from across the industry to design the new services. In addition to regular workshops we have continued to engage with key industry forums and representatives. This engagement has included specific briefings to key industry forums such as the ASP Services Committee, the Australian Institute of Superannuation Trustees (AIST) and the SuperStream Reference Group (SSRG). All of these groups have expressed support for the reporting changes. UNCLASSIFIED EXTERNAL 6

18 What are the timeframes for MAAS and MATS deployment? APRA-regulated funds will continue to lodge an MCS in the current format for the and income years. The last MCS lodgement in the current format will be due by 31 October Both MAAS and MATS will be deployed in The member information we need from funds to meet the requirements of the super changes, including members transfer balance cap and total super balance, will be captured from September 2017 by the Transfer Balance Account Report (TBAR) until we fully implement the redesigned MCS. The MAAS service will start from April 2018 with an extended cutover period through to October The detailed design process for MATS is currently underway and we anticipate this will continue until September 2017 with a proposed deployment from late As part of the detailed design we will work with funds on a sensible transition process that balances government commitments with fund obligations will be a transitional year with the expectation that full solutions will be in place for reporting from 1 July How confident is the ATO in the MATS design? The working group has confirmed that the current design concept is the optimum one to produce the desired outcomes even while we work through a few remaining design considerations. The ATO has also developed the intent statement (Attachment A) and held briefing sessions with a number of industry representatives and stakeholder groups, including the SSRG, ASP Services Committee and the AIST. All are in broad support of the changes. On the basis of the outcomes of the design work, we have now confirmed that we will proceed with the MATS concept. Having secured support from key stakeholders, we will now continue to work closely with industry to ensure the final detailed design is sensible, addresses any outstanding design issues, and has broad industry agreement. What options are available for the phased implementation of MAAS and MATS? The ATO is committed to ensuring that we develop a pragmatic transitional approach with industry that balances fund obligations and government commitments. We will now begin detailed planning to schedule an extended build, deploy and cutover period from 1 July 2018 to 1 July Deployment and cutover schedules will be developed in consultation with industry. We acknowledge that during the transition period not all required data will be available to be reported. We ll work with funds to ensure that complete data is reported by 1 July UNCLASSIFIED EXTERNAL 7

19 The implementation and transition approach is being developed in the detailed design sessions, which began in early August How does the superannuation reporting transformation fit with the SuperStream roadmap? The SuperStream roadmap outlines the remaining deliverables under the SuperStream program of work. SuperStream was broken into three key deliverables: business to business completed in 2016 and included fund-to-fund rollovers and employer-to-fund contributions government to business this commenced in 2016 with ATO-to-fund rollovers and continues in 2017 with ATO-to-fund contributions business to government includes fund-to-ato rollovers and fund contribution reporting to the ATO. The APRA fund superannuation reporting transformation fits into this third component of SuperStream. The first component was the reporting of open and closed accounts through SuperTICK3 in March 2017, and the remaining elements include fund-to-ato rollovers in January 2018 as well as MAAS and MATS. How will the superannuation reporting transformation affect government reporting of super guarantee contributions under Single Touch Payroll? Before the redesign of business reporting arrangements, the Single Touch Payroll design included the requirement for employers to report to the ATO both when they accrued a super guarantee payment obligation and when that payment was made to a super fund. During the redesign industry and government acknowledged that receiving confirmation of super guarantee payments from funds would provide greater assurance for members that their super liability had been paid by the employer. Under the new design, funds will report contribution payment transactions through MATS and employers will not be required to report contribution payment information to the ATO. How will taking on the responsibility for reporting employer super guarantee contributions affect funds? The agreed new reporting framework means that APRA-regulated funds will report contribution payments (including superannuation guarantee) to the ATO on an event-based transactional basis. This new way of reporting will directly support a range of ATO programs of work including the super guarantee contribution payment reporting requirements previously included under Single Touch Payroll. UNCLASSIFIED EXTERNAL 8

20 By moving the responsibility for reporting employer super guarantee payments from employers to funds, the ATO will be able to view the employer making the contribution, the fund member receiving the contribution, when the contribution was made and what type of contribution it was, all within a short time of the contribution being allocated by the fund. Increased visibility of super guarantee contributions as they are allocated to a member s account will allow the ATO to: improve data analytics to identify patterns of non-compliance and monitor trends (eg by industry, size, location, or specific employer) provide employers with timely and tailored engagement, education and assistance to meet their obligations. Contemporary communication approaches such as SMS, popup messages, mygov alerts, automated letters, or phone calls can be used with a greater understanding of the employer s circumstances monitor specific employer contribution payment behaviours and respond to nonpayment circumstances. This can occur without the fund member needing to check their account or lodge a complaint about their employer provide employees with faster and more complete information about their entitlements through visibility of payments being made to their fund via mygov determine with greater accuracy if correct super guarantee contributions are being made by employers (ATO data-matching capabilities are significantly increased when fund information is combined with payroll event reporting delivered by Single Touch Payroll) make a better informed and quicker assessment of an employer s compliance risk with appropriate responses. We can apply low-cost options to engage with employers earlier and better target audit resources to the highest-risk employers identify lower-risk employers experiencing short-term difficulties, enabling interactions such as reminders or nudge communications. This will encourage businesses to take action earlier and correct their position before business cash flow issues worsen support earlier audit and debt collection actions with high-risk employers who disengage from the super guarantee system and routinely fail to meet their obligations. This will result in increased collections to secure super guarantee payments. How does the APRA fund superannuation reporting transformation affect Single Touch Payroll? The new reporting solution will provide the ATO with event-based transactional data including super guarantee reporting. While this was an employer obligation under the original Single Touch Payroll design, obtaining this information from funds as part of the new reporting requirements will provide better member outcomes. This is because the reporting will be based on confirmation that the money has been allocated to an account. Event-based reporting will support fund members by showing details of their super balances, caps and contribution amounts throughout the year. This will allow members to make better- UNCLASSIFIED EXTERNAL 9

21 informed decisions, minimise fund compliance costs, and encourage willing participation in the system. It will allow the ATO to more closely monitor compliance with the concessional and nonconcessional contribution caps. Timelier data on employer contributions will also increase super guarantee compliance and enable better-informed and faster assessments of employer compliance risks. UNCLASSIFIED EXTERNAL 10

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