APRA Changes Data Collection Requirements for Every Australian Superannuation Fund

MEDIA RELEASE

APRA Changes Data Collection Requirements for Every Australian Superannuation Fund

APRA to increase data collection from 900 to 4,000 elements, IQ Group calls for SBR to manage onerous data reporting volumes

Melbourne, 8 November 2012 - IQ Group today cautioned industry that changes to data collections requirements for Superannuation Funds will place an onerous operational and technological burden on Funds without the integration of Standard Business Reporting (SBR) by both APRA and ASIC. APRA has proposed to increase its information held about investments for each Fund, raising the data items requiring reports from 900 to approximately 4,000 data elements. Funds will need to incorporate new and more sophisticated data management capabilities into existing operation environments to manage the scale and complexity required. The new data requirements effectively make APRA a product regulator as well as a fund prudential regulator.

Recently APRA announced significantly enhanced reporting requirements for APRA-regulated Superannuation Funds from July 2013.  It proposes to collect greatly increased information about investments via 31 reports across 10 different groups, together with the threat of a strict liability offence penalty regime.

Following a detailed review of these reports, IQ Group's CEO, Graham Sammells, commented on the new level of detail and how that would be sourced. "These new reports for APRA are multi-layered and require data about MySuper products for 'sub-funds' and for certain choice funds. There will be reporting of multiple levels of returns, including gross returns (including incorporation of hidden costs), returns net of investment management costs, and returns net of all costs.

"How a fund determines to report performance, especially the treatment of administration and advice fees, will have implications for both projections and reporting of historic performance," Sammells outlined.

Additionally this new reporting regime will have one section listing asset classes and the main assets or holdings with fund managers in each asset class. Another section is particularly related to looking through multiple related entities. The overall level of detail in many cases is greater than funds and custodians themselves currently collect. So the requirements are likely to require a wholesale change in third-party contracts.

For Sammells these greatly expanded requirements demand a complete rethink on how to collect and manage the data. 

"The job to collect and collate this data is now beyond any Analyst in any Trustee Office. It is now totally inadequate to manually scramble around and collect data from finance, accounting, operations, administration, the custodian, asset consultants, investment managers and others, and maintain copious spread sheets.  Everything on the product dashboard and fund advertising will have to be based on the data reported to APRA.  Funds need to have clear protocols governing the use of the data, data dictionaries, and means by which they are kept up-to-date.  There needs to be traceability from source to report, with robust processes that ensure the requisite reviews and approvals," Sammells outlined.

He continued: "These new data requirements effectively make APRA a product regulator as well as a fund prudential regulator and inevitably will require APRA and ASIC to review their relationship."

For IQ Group, a specialist provider for solutions and strategies for the Superannuation industry, it is

looking to both ASIC and APRA to jointly implement the SBR framework in lieu of all this data being collected in an ad hoc fashion. 

In conclusion Sammells commented: "No doubt there will be subtle but important differences between the data elements reported to APRA and ASIC. For example, definition of asset classes, allocation of assets into asset classes, definition of fees and costs, to name a few.  Enhancing SBR for the Superannuation industry, with a whole of government focus, will be a key enabler for the industry to meet the requirements as efficiently and effectively as possible, and to minimise the costs for members."

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About IQ Group

IQ Group advises Australian enterprises on how to implement business and technology solutions to improve efficiencies and reduce operational risk. Its specialist consulting services span Operations, Technology, Risk and Microsoft Solutions Practice lines for all industry sectors. It also offers a range of innovative solutions, such as iqBoard, iqCloud and iqBI to address today’s governance, onshore cloud computing and Business Intelligence initiatives.

For further information please visit http://www.iqgroup.com.au/

Cathryn van der Walt, 12 Worlds on behalf of The IQ Group, Tel: +61 (0) 402 327 633, e: cathryn@12worlds.com