We take a look at what the ATO’s new event-based Super Fund Reporting means for you.
The biggest change to fund reporting to the ATO is about to become a reality - and implementation is going to cost the super industry many millions of dollars. While there are plenty of reasons to support more frequent reporting, the challenges are also substantial and shouldn’t be underestimated.
The move from annual, aggregated reporting to transactional, event-based reporting is the final stage of SuperStream. Improving the transparency of the super system for the ATO and consumers is a really big deal – a big project with big implications.
More reporting, more often:
The new reporting services have the unspectacular names MAAS (Member Account Attribute Service) and MATS (Member Account Transaction Service). MAAS largely deals with account details, and MATS with contribution details.
Together, they will replace member contribution statements, lost member reporting and retirement phase reporting, and will ultimately generate much more up to date information that can be seen by fund members on myGov. These new services will make it faster and easier for the ATO to track employer superannuation compliance.
Driving Project Development:
In addition to improved tracking of employer superannuation compliance, these key changes will allow the government to:
- Fully implement 2016 budget tax measures
- Support contribution reporting under Single Touch Payroll
- Provide a data feed for a new online choice of super fund form
- Help the ATO monitor employer superannuation guarantee compliance
- Support further development of SuperStream
Following a year of discussion with the super industry about these projects, the ATO announced their decision to proceed at an industry workshop on 29 August. Details of the design are currently in development, with the services expected to be available for testing from July 2018. The plan is for complete data to be reported by 1 July 2019.
The program of work needed for the new reporting framework will be extensive, time-consuming and expensive. Like SuperStream, the industry will have to make a big upfront investment with the return on that investment being received over the long term – much of that benefit being for members, the ATO and the community as a whole.
Impact on Superannuation Funds:
From a fund’s perspective, the advantages of these changes include the removal and consolidation of many existing reports, an increased flow of superannuation payments, and improvement in system integrity overall. On the other hand, funds and administrators need to plan for considerably more frequent reporting to the ATO. This will impact systems, processes, procedures, and even the nature of engagement with both employers and employees. Hopefully, the development of MATS and MAAS will allow these services to be the main way superannuation payments are reported to the ATO.
With the introduction of MATS and MAAS, super reporting shouldn’t have to be a necessary part of Single Touch Payroll (STP). Reporting based on confirmation that contributions have been allocated to accounts should provide greater member benefits than that would have been provided under STP super reporting.
A decision to remove super reporting from STP should be made by the ATO, and the super industry should be encouraging them to do this.
Over the past 6 years IQ Group has been at the heart of SuperStream, and during the last 15 years no other consulting firm has delivered as many superannuation projects. We offer a specialist team able to draw on their deep industry knowledge to help make implementation a cost-effective and compliant reality.
For more industry insights like these, make sure you’re following us on LinkedIn and check out our other recent posts here. If you would like to find out more about these changes or how we can help, leave us a comment below or contact us at firstname.lastname@example.org.
Executive Superannuation Policy Advisor, VIC