The latest Exposure Draft (ED) “Superannuation Payments and Data Regulations” legislation from SuperStream (part of the Stronger Super government initiative to reform the Australian superannuation industry) focuses on the data standards for superannuation payments, placing enforceable requirements on super entities, employers and intermediaries processing data on behalf of these entities.
The SuperStream legislation is intended to improve the administrative efficiency and management of super accounts and this tranche “enables superannuation data and payment regulations to deal with payments and information related to superannuation transactions and reports”. Additionally it gives the Commissioner of Taxation the power “to issue mandatory superannuation data and payment standards for superannuation entities and employers”.
These measures represent great progress on messaging format standards – with the format being XBRL – although the ED is still relatively high level and we await regulations to provide the detail required to lock down systems and procedural changes.
The ED is somewhat silent on the delivery mechanism for the messages, however, there is some suggestion that a standard will be developed and implemented. A centralised hub delivered by government has been ruled out, opening up delivery mechanisms to alternatives. Messaging hubs or point-to-point delivery using an end point look up service can provide delivery mechanisms for SuperStream, allowing senders to access destinations and bank account details directly. A lookup service would need to be supported by data from the ATO which is being discussed but agreement has not been finalised to date. In the absence of such a look up service, affiliated funds will be forced to form alliances to deliver messages and reduce the costs associated with commercial clearing hubs, but this would only cover funds that exchange high volumes of data.
Another aspect of SuperStream that may cause potential early problems is how to handle the sheer size and volume of the XBRL messages. XBRL messages are naturally verbose and could lead to a ten times increase in aggregated contribution files from Super entities and intermediaries. Additionally, analysis of contribution data flows on Bravura Solutions systems clearly shows cyclical data spikes during the month where some dates are favoured over others for contribution payments. More evenly spreading these contributions over the month would reduce the impact on infrastructure and the potential cost of upgrades.
A final and, in my opinion, the most significant issue to consider for providers and administrators is how their systems will need to be configured or updated to support the messaging lifecycle. They will need to adjust their systems to cater for not only the acceptance and production of the XBRL messages, but how they are routed and lifecycles tracked.
The standards stipulate that a conversation needs to occur between participating parties. It’s not simply a case of listening and responding, rather each message has a number of steps that need to be orchestrated. SLAs, for example, relating to the message delivery are absent from the public documents currently available. An obvious question when thinking about implementing message lifecycle management is how long to wait until it is assumed that the message was not received and hence it needs to be resent. As an example, messaging networks we deal with in the UK have such SLAs in place. There is clearly a range of issues that need to be worked through before SuperStream changes can be implemented at these sites.
With little over a year until implementation of the legislation for large businesses, planning needs to start now in order to effectively to handle the reforms. Superannuation providers will need to understand how messages will be delivered in order to develop the appropriate infrastructure to receive the messages, deal appropriately with them internally and provide the information around lifecycle tracking and auditing.
How are you planning for SuperStream?