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Reporting Framework - Frequently Asked Questions

Note: the numbering of these questions is fixed and will not change as new questions are added.

APRA’s reporting frequently asked questions (FAQs) provide timely guidance on commonly asked reporting related questions. The FAQs are designed to clarify reporting issues raised by RSE licensees and to assist them in meeting their reporting obligations. APRA encourages licensees to report to APRA in accordance with the FAQ guidance, to the extent practicable.

The FAQs refer to the provisions of APRA’s reporting standards but, until the FAQs are incorporated into the legislative reporting instruments, they do not form part of the law or create enforceable requirements.

It is APRA’s practice, where appropriate, to incorporate FAQ guidance into the final reporting standards, forms and instructions from time-to-time. When this occurs, APRA provides formal notice to the superannuation industry and the relevant FAQs are removed from this page.

For reference purposes only, APRA has archived a number of FAQs which contain guidance on matters that are now covered in the final reporting standards, forms and instructions.

Updated: 24 March 2016

Reporting Framework - General

FAQ 6: What do RSE licensees need to do to obtain a security certificate to report the new levels under the new reporting collection?

SRF 001.0

FAQ 11: If an investment option is offered through multiple product channels or with multiple fee structures, with no change to the underlying investment strategy, and several of these versions of the investment option pass the threshold, how many times should the investment option be classified as a select investment option and reported to APRA?

FAQ 122: SRF 001.0 must be submitted annually and also on an ad hoc basis when there are changes to information previously reported. When should the annual SRF 001.0 be submitted? When should RSE Licensees contact APRA to request an ad hoc SRF 001.0 to report changes to information previously reported?

Defined benefit reporting

FAQ 105: When reporting minimum benefits in item 1.3 of Reporting Form SRF 160.0 Defined Benefit Matters (SRF 160.0), can the item be left blank where an RSE licensee does not currently have this information available? (added 8 September 2014)

FAQ 107: When reporting detailed member segmentation on Reporting Form SRF 160.0 Defined Benefit Matters (SRF 160.0), Reporting Form SRF 610.0 Membership Profile (SRF 610.0) and Reporting Form SRF 610.1 Changes in Membership Profile (SRF 610.1), how should the segmented information be calculated for defined benefit members in the period prior to an RSE licensee adopting Australian Accounting Standards Board Standard AASB 1056 Superannuation Entities (AASB 1056) for the purpose of preparing its RSE-level financial statements? (added 8 September 2014)

Financial Statements

FAQ 25: SRF 330.0 requires reporting of ‘other members’ benefit flows out’. What is expected to be reported in this item?

FAQ 28: Will APRA accept reporting of employer additional (non-mandatory employer contributions) and salary sacrifice contributions in a single data item in the reporting collection? 

SRF 330.0

FAQ 44: Some data items in Reporting Form SRF 330.0 Statement of Financial Performance (SRF 330.0) are not currently captured in an RSE licensee’s systems. How should these be reported before the implementation of the 'SuperStream' Data and Payment Standards?  (amended 11 August 2014)

FAQ 45: SRF 330.0 requires an RSE licensee to report information about expenses associated with insurance administration for an RSE. What information should an RSE licensee seek from their insurer to complete this item? 

FAQ 85: How are expenses related to member initiated activities to be reported in item 10.1.1 in Reporting Standard SRS 330.0 Statement of Financial Performance? (added 1 April 2014)

SRF 330.1

FAQ 114: In Reporting Form SRF 330.1 Statement of Financial Performance (SRF 330.1) and Reporting Form SRF 330.2 Statement of Financial Performance (SRF 330.2), are “members’ benefit flows in” to be reported as net or gross of contribution tax? (added 8 September 2014)

Investments Reporting

FAQ 32: How should flows in indirect holdings be reported on SRF 530.1 (for the 2013-14 year of income) and SRF 531.0 (for the 2014-15 year of income)?

FAQ 59: When should an RSE with a balance date other than 30 June cease reporting SRF 530.1 and commence reporting SRF 530.0 and SRF 531.0?

FAQ 93: How should an RSE licensee interpret the depth of look-through reporting requirements within the investments forms and disclosure forms? (added 14 May 2014)

 
 

FAQ 103: How are RSE licensees required to report counterparty credit ratings to APRA on Reporting Form SRF 532.0 Investment Exposure Concentration (SRF 532.0) and Reporting Form SRF 534.0 Derivative Financial Instruments (SRF 534.0), when directly held debt investments, or counterparties to over-the-counter derivative contracts, have been rated by more than one credit rating agency?  (added 11 August 2014)

SRF 602.0

FAQ 119: What process is involved when an RSE, defined benefit RSE, PST, ERF, SAF or SMADF is winding up, and which forms are required to be submitted as part of the wind-up return? (added 1 October 2014) 

Disclosure Forms (700 Series)

FAQ 93: How should an RSE licensee interpret the depth of look-through reporting requirements within the investments forms and disclosure forms? (added 14 May 2014)

SRF 700.0
 
SRF 702.0

FAQ 118: How should an RSE licensee split dollar value and percentage value fees, costs and taxes when reporting on Reporting Form SRF 702.0 Investment Performance (SRF 702.0)? (added 1 October 2014) 

SRF 703.0

FAQ 88: What does ‘gross of tax obligations’ mean in the instructions of SRF 703.0?  (added 14 May 2014)

FAQ 89: My insurance administration fee is bundled with my insurance premium. How do I report on SRF 703.0? (added 14 May 2014)

FAQ 90: How are administration fee levels and investment fee levels for a lifecycle MySuper Product to be reported in item 3 and in item 4 respectively on SRF 703.0? (added 14 May 2014)

FAQ 91: How are performance fees to be reported in item 1 of SRF 703.0? (added 14 May 2014)

 

Audit Requirements

FAQ 62: In the ‘Quality Control’ section of each reporting standard, there is reference to limited assurance audit requirements. However, Prudential Standard SPS 310 Audit and Related Matters requires some forms to be audited on a reasonable assurance basis. How should these provisions be read? 

FAQ 63: Is the RSE auditor required to review and test the RSE licensee’s systems, procedures and internal controls (refer to Prudential Standard SPS 310 Audit and Related Matters, paragraph 19(b)(ii)) or satisfy any of the other new audit requirements before the RSE licensee submits the first quarterly reporting forms to APRA?

 

 FAQ 6: What do RSE licensees need to do to obtain a security certificate to report the new levels under the new reporting collection?

A: APRA’s previous reporting requirements applied only to the RSE level. As there are now reporting forms that apply at the RSE licensee level, each RSE licensee or an agent must be authorised for AUSkey use and then install the latest version of D2A: http://www.apra.gov.au/CrossIndustry/Documents/AUSkey-Acknowledgement-form.docx.  

More info about D2A and obtaining an AUSkey can be found here.

Issues arising on installation of the latest version of D2A should be referred to: d2ahelp@apra.gov.au.

 

 

 

FAQ 11: If an investment option is offered through multiple product channels or with multiple fee structures, with no change to the underlying investment strategy, and several of these versions of the investment option pass the threshold, how many times should the investment option be classified as a select investment option and reported to APRA?

A: APRA expects an RSE licensee would consider the content of the reporting forms, and the purpose of the data collection, applying to select investment options to determine what should be classified as a select investment option for their circumstances. If all the information required on the select investment option reporting forms would be identical for multiple versions of the investment option, APRA will require the select investment option information to be reported only once. If, however, the forms would contain different information, each version of the investment option that meets the threshold criteria must be reported as a select investment option.

 

 FAQ 122: SRF 001.0 must be submitted annually and also on an ad hoc basis when there are changes to information previously reported. When should the annual SRF 001.0 be submitted? When should RSE Licensees contact APRA to request an ad hoc SRF 001.0 to report changes to information previously reported?

 A: Please refer to the SRF 001.0 reporting guidance.

  

FAQ 105: When reporting minimum benefits in item 1.3 of Reporting Form SRF 160.0 Defined Benefit Matters (SRF 160.0), can the item be left blank where an RSE licensee does not currently have this information available? (added 8 September 2014)

A: Yes, item 1.3 of SRF 160.0 may be left blank in the circumstance where an RSE licensee does not currently have this information available.

Paragraph 23 (e) of Prudential Standard SPS 160 Defined Benefits Matters (SPS 160) requires that an actuarial report of an initial or regular investigation of a defined benefit fund contain a statement indicating the value of the liabilities of the fund in respect of the minimum benefits of the members of the fund.

SPS 160 became effective on 1 July 2013 and APRA recognises that reports of actuarial investigations completed before this date may not include the value of the liabilities of the fund in respect of the minimum benefits of the members of the fund. This may give rise to a transitional issue in the completion of item 1.3 of SRF 160.0.

This transitional issue will cease once an actuarial investigation under SPS 160 has been completed. From this point onward, an RSE licensee must complete item 1.3 of SRF 160.0 in line with the reporting instructions.

 

FAQ 107: When reporting detailed member segmentation on Reporting Form SRF 160.0 Defined Benefit Matters (SRF 160.0), Reporting Form SRF 610.0 Membership Profile (SRF 610.0) and Reporting Form SRF 610.1 Changes in Membership Profile (SRF 610.1), how should the segmented information be calculated for defined benefit members in the period prior to an RSE licensee adopting Australian Accounting Standards Board Standard AASB 1056 Superannuation Entities (AASB 1056) for the purpose of preparing its RSE-level financial statements? (added 8 September 2014)

A: In order to avoid unnecessary reporting burden, APRA will take a flexible approach for reporting periods prior to an RSE licensee adopting AASB 1056 for the purpose of preparing its RSE-level financial statements:

  • In respect of: 
    • SRF 160.0 items 6 and 7;
    • SRF 610.0 items 1 to 6; and
    • SRF 610.1 items 1, 4, 5 and 6;

an RSE licensee may provide segmentation information with reference to defined benefit members’ benefits (i.e. the present value of accrued benefits reported in the RSE-level financial statements) or with reference to vested benefits. If vested benefits are used, the RSE licensee is encouraged to use up-to-date calculations, where possible.

  • In respect of all other items, where defined benefit members’ benefits are reported, the value reported should align with the defined benefit member liabilities reported in the defined benefit RSE’s or SAF’s financial statements at the reporting date.

Once an RSE licensee has adopted AASB 1056, APRA expects that an RSE licensee will report member segmentation information under SRF 160.0, SRF 610.0 and SRF 610.1 in line with the reporting instructions (i.e. with reference to defined benefit members’ benefits, not vested benefits).

 

FAQ 25: SRF 330.0 requires reporting of ‘other members’ benefit flows out’. What is expected to be reported in this item?

A: APRA expects that outflows that cannot otherwise be classified into the other categories of ‘members benefits out’ on SRF 330.0 will be reported under this item. For example, withdrawals as a result of family law splitting arrangements may be reported under this item.

 

FAQ 28: Will APRA accept reporting of employer additional (non-mandatory employer contributions) and salary sacrifice contributions in a single data item in the reporting collection?

A: APRA’s new reporting requirements in SRF 330.0 require the specific identification of salary sacrifice contributions in item 1.1.2. Non-mandatory employer contributions should not be reported in this item but should instead be reported in item 1.1 as part of ‘employer contributions’.

  

FAQ 44: Some data items in Reporting Form SRF 330.0 Statement of Financial Performance (SRF 330.0) are not currently captured in an RSE licensee’s systems. How should these be reported before the implementation of the SuperStream Data and Payment Standards? (amended 11 August 2014)

A: APRA acknowledges that the following items on SRF 330.0 have not historically been required to be reported to APRA and may not have been readily available in an RSE licensee’s systems:

  • 1.1.1 Super guarantee contributions by Employer;
  • 1.1.2 Salary sacrifice contributions by Employer;
  • 1.8.1 Inward SMSF rollovers; and
  • 2.2.1 Outward SMSF rollovers.

Where an RSE licensee holds the information required by these four data items at the reporting date, it must be reported to APRA. However, where an RSE licensee is unable to provide this information, APRA will permit submission of SRF 330.0 with these four data items omitted (left blank) for reporting periods ending before 1 July 2014 (i.e. quarterly and annual reporting for 1 July 2013 to 30 June 2014).

APRA will require all RSE licensees to provide information in all four of these data items (1.1.1, 1.1.2, 1.8.1 and 2.2.1) when submitting SRF 330.0 for all reporting periods ending on or after 1 July 2014.

Leaving these items blank will trigger a D2A confirmation question. APRA expects an RSE licensee that leaves these items blank for reporting periods up until 30 June 2014 will explain in its answer to the confirmation question why they do not currently have the information available. This will facilitate APRA identifying those blank responses which are as a result of zero activity and those which are as a result of a transitional issue.

 

FAQ 45: SRF 330.0 requires an RSE licensee to report information about expenses associated with insurance administration for an RSE. What information should an RSE licensee seek from their insurer to complete this item?

Item 4 on SRF 330.0 requires reporting of insurance outflows which includes, but is not limited to, reporting of premiums debited from members’ accounts. The purpose of items 14.1.1 and 14.2.1 is to collect information about the portion of these premiums that relate to insurance administration. Where the RSE licensee does not have sufficient information available to report insurance administration expenses, APRA expects the RSE licensee would seek information from their insurer about the portion of premiums that relate to insurance administration. If the insurer cannot provide details about this portion to the RSE licensee because their systems do not record the portion of premiums, the RSE licensee is expected to report on a best endeavours basis and resubmit the actual data if and when they obtain it.

 

FAQ 85: How are expenses related to member initiated activities to be reported in item 10.1.1 in Reporting Standard SRS 330.0 Statement of Financial Performance? (added 1 April 2014)

A: Item 10.1.1 in SRS 330.0 requires reporting about the portion of total administration expenses (reported in item 10.1) that are a result of activities engaged in at the request or with the consent of a member.

This means that the value reported in item 10.1.1 must reflect any expense charged to the RSE licensee by the administrator that relates to such member initiated activities. APRA expects that usual practice will involve an RSE licensee charging members a fee for such member initiated activities; do not report the amount of the fees that have actually been charged to members in item 10.1.1.

Where total administration expenses in respect of member initiated activities are not separately identified, APRA expects an RSE licensee would obtain this information for the purposes of reporting under SRF330.0.

 

 

 

FAQ 114: In Reporting Form SRF 330.1 Statement of Financial Performance (SRF 330.1) and Reporting Form SRF 330.2 Statement of Financial Performance (SRF 330.2), are “members’ benefit flows in” to be reported as net or gross of contribution tax? (added 8 September 2014)

A: “Members’ benefits flows in” is to be reported net of contribution tax and contribution surcharge in Item 1 of SRF 330.1 and SRF 330.2.

For the avoidance of doubt, in line with the reporting instructions, items 1.1, 1.2, 1.3 in SRF 330.1 and SRF 330.2 are to be reported gross of contributions tax and any other tax.

FAQ 32: How should flows in indirect holdings be reported on SRF 530.1 (for the 2013-14 year of income) and SRF 531.0 (for the 2014-15 year of income)?

A: As the transactions that must be reported on SRF 530.1 and SRF 531.0 are the transactions of the RSE, ‘income’ refers to income of the RSE, ‘unrealised gains/losses’ refers to the RSE’s unrealised changes in value (such as gains or losses arising from unit price movements) and ‘realised gains/losses’ are the RSE’s realised gains or losses from selling their holdings. If an RSE licensee only has information about the end of period asset allocation for the vehicle through which the RSE has invested, APRA expects the RSE licensee to allocate all income, gains and losses using these end of period asset allocations.

Where the investment vehicle is an associate of the RSE licensee, look-through requirements mean that the RSE licensee must ‘look through’ the vehicle to determine whether they can accurately allocate income, gains and losses in a manner that is more detailed that just reporting the end of period values. For example, an RSE licensee must seek information from the associated vehicle as to whether all losses were related to bonds, all income was related to property investments or all gains were in equity.

 

FAQ 59: When should an RSE with a balance date other than 30 June cease reporting SRF 530.1 and commence reporting SRF 530.0 and SRF 531.0?

A: SRF 530.0 and SRF 531.0 commence for all RSEs in respect of annual reporting periods ending on or after 1 July 2014. RSEs with a balance date other than 30 June must commence reporting on SRF 530.0 and SRF 531.0 on 1 July 2014, regardless of the number of quarters that have been reported on SRF 530.1.

However, APRA recognises that an RSE licensee must be able to provide the information required by SRF 531.0 from the beginning of the RSE’s year of income, in order to fully comply with SRF 531.0. Therefore, APRA will grant the following transition relief to RSEs with a balance date other than 30 June:

Where their systems cannot provide the information required in column 4 and column 5 of item 1 and item 2 on SRF 531.0, an RSE licensee of an RSE with a balance date other than 30 June should report ‘not applicable’ in these columns until the RSE has reached its first balance date immediately after 1 July 2014. APRA expects that RSE licensees will be able to provide complete information when reporting on column 4 and column 5 of items 1 and 2 in SRF 531.0 for their first year of income commencing after 1 July 2014.

 

FAQ 93: How should an RSE licensee interpret the depth of look-through reporting requirements within the investments forms and disclosure forms? (added 14 May 2014)

A: Subsection 13(4A) of the Financial Sector (Collection of Data) Act 2001 (FSCOD Act) establishes the requirement for an RSE licensee to provide to APRA information in relation to the investment of assets and any deductions (whether to cover fees, costs, taxes, or for any other purpose) from the return on investments made. In FAQs 37 and 66, APRA has clarified that, in practice, this involves looking through cascading entities to the first non-connected entity and reporting the ultimate asset allocation in which the investment is held, in addition to the investment performance of each investment vehicle which includes the associated fees, costs, taxes and other deductions.

Under Prudential Standard SPS 530 Investment Governance, an RSE licensee is required to determine appropriate measures, approved by the Board, to monitor the performance of each investment in each investment option and each MySuper product on an ongoing basis.

When placing funds with an investment manager, APRA encourages RSE licensees to obtain reporting from investment managers that permits the RSE licensee to form an adequate understanding of the drivers of investment performance, including deductions from gross return.

RSE licensees are also encouraged to make all reasonable efforts to obtain information about their investments beyond the first non-connected entity, as APRA is of the view that obtaining this information reflects sound investment governance. If an RSE licensee already receives this level of information in relation to its investments, it should make all reasonable efforts to continue to receive this in future. Where this level of information is available to an RSE licensee, it should be reported to APRA.

 

FAQ 96: How should an RSE licensee report benchmark asset allocation and asset allocation ranges on SRF 533.0? (added 16 June 2014)

A: In accordance with Prudential Standard SPS 530 Investment Governance, when an RSE licensee formulates an investment strategy for an investment option, APRA requires that the RSE licensee determine asset allocation targets and ranges that are appropriate to the investment objectives of the investment option.

There are a number of different asset allocation approaches that may be adopted by an RSE licensee in formulating an investment strategy, such as strategic asset allocation (SAA) or dynamic asset allocation (DAA) approaches. Irrespective of which asset allocation approach is used, APRA expects that an RSE licensee would adopt a formal approach to determining asset allocation.

Under a SAA approach, a benchmark asset allocation is required under SPS 530, which will provide the optimal balance between expected risk and return for a long term investment horizon.

If an RSE licensee adopts a SAA approach, the asset mix formulated in this process should be reported to APRA in accordance with the APRA-defined asset class types in column 1 of item 1. The benchmark asset allocation, the upper end range and lower end range for each asset class type is to be reported in column 4, column 5 and column 6 respectively.

For example, an RSE licensee sets a SAA of 10% to ‘alternative investments’ and this allocation has been structured based on an underlying benchmark asset allocation of 50% infrastructure, 25% managed futures and 25% real estate. APRA expects the RSE licensee to report the underlying benchmark asset allocations to APRA. As per the reporting instructions, if the asset class of the underlying asset allocation does not align with the APRA-defined asset class types, then report the asset class type as ‘other’ in column 1 of item 1. In this example, since managed futures are not an APRA-defined asset class type, APRA expects the RSE licensee to report the underlying benchmark asset allocation to managed futures as asset class type ‘other’. Therefore, the RSE licensee is to report 5% to asset class type ‘infrastructure’, 2.5% to asset class type ‘other’ and 2.5% to asset class type ‘property’ in column 4 of item 1.

Under a DAA approach, asset allocation may change more frequently over the investment horizon in response to changes in market conditions or the RSE licensee’s short and medium term outlook.

If an RSE licensee adopts a DAA approach, the asset mix formulated in this process should be reported to APRA in accordance with the APRA-defined asset class types in column 1 of item 1. The upper end range and lower end range for each asset class type is to be reported in column 5 and column 6 respectively. If the RSE licensee has adopted a benchmark asset allocation, report the allocation in column 4, otherwise leave column 4 blank.

 

FAQ 97: How should an RSE licensee incorporate derivative exposures when reporting directly held and indirectly held investments on Reporting Form SRF 533.0 Asset Allocation (SRF 533.0)? (amended 1 October 2014)

A: An RSE licensee may consider the use of derivatives as part of the investment strategy for an investment option. Derivatives may be used to optimise investment strategy implementation or for risk management purposes. RSE licensees may implement derivatives strategies through either directly held or indirectly held investments.

APRA has identified an error in the instructions for SRF 533.0 regarding reporting of directly held investments in derivatives. The instructions incorrectly exclude reporting of directly held derivatives from SRF 533.0. When reporting to APRA on SRF 533.0, APRA expects an RSE licensee to include directly held derivatives.  Derivatives are to be considered as part of the overall asset allocation of an investment option, rather than in isolation.

APRA expects that an RSE licensee would not generally consider the use of derivatives when determining a benchmark asset allocation. Therefore, derivatives would not ordinarily need to be reported in item 1.

The value of investments reported in column 6 of item 2 is to be calculated as the sum of the value of all physical investments (having applied look-through) together with the equivalent asset position of the derivative instruments. The equivalent asset position of a derivative means the dollar amount of the underlying physical asset that the RSE will need to hold to generate the same return as holding the derivative. Therefore, the value of total investments reported in item 2.1 will include directly held investments in derivatives.

The information reported in item 3 must represent the net movement of each asset class type. The net movement of each asset class type is calculated as the sum of the movements in physical investments (having applied look through) together with the movements in directly held and indirectly held derivatives.

This FAQ is to apply to SRF 533.0 only, which must be completed for MySuper investment options. Reporting on Reporting Form SRF 530.0 Investments, Reporting Form SRF 530.1 Investments and Investments Flows and Reporting Form SRF 531.0 Investment Flows, which must be completed for RSEs, defined benefit RSEs, pooled superannuation trusts and eligible rollover funds is according to the instructions to those forms. That is, RSE licensees must continue to exclude reporting about directly held derivatives on those forms, as they are required to be reported on Reporting Form SRF 534.0 Derivative Financial Instruments.

Although FAQ 97 has not yet been incorporated into Reporting Standard SRS 533.0 Asset Allocation, APRA encourages, to the extent practicable, RSE licensees to report to APRA in accordance with the FAQ guidance. APRA will take a measured approach to data queries in relation to this aspect of the collection for the June 2014 quarter.

FAQ 103: How are RSE licensees required to report counterparty credit ratings to APRA on Reporting Form SRF 532.0 Investment Exposure Concentration (SRF 532.0) and Reporting Form SRF 534.0 Derivative Financial Instruments (SRF 534.0), when directly held debt investments, or counterparties to over-the-counter derivative contracts, have been rated by more than one credit rating agency? (added 11 August 2014)

A: APRA requires RSE licensees to report counterparty credit ratings for ‘directly held investments – large exposures’, in item 1, column 8 on SRF 532.0. In addition, APRA requires RSE licensees to report counterparty credit ratings for counterparties to over-the-counter derivatives contracts in item 4, column 2 on SRF 534.0. The counterparty credit ratings, used for the purposes of APRA reporting requirements, are generally consistent with long-term credit ratings provided by credit rating agencies.

APRA’s reporting instructions state that where an RSE has an investment with multiple ratings from two or more credit rating agencies, the RSE licensee must consistently apply the lowest rating where the individual ratings conflict. The reporting instructions do not require an RSE licensee to solicit credit ratings from each of the credit rating agencies which provide a rating on that particular investment or counterparty. If the RSE licensee has only solicited credit ratings from one credit rating agency, then the credit rating from the single ratings agency is to be used to determine counterparty rating grades to be reported to APRA.

Where an RSE licensee has solicited credit ratings from multiple ratings agencies, the RSE licensee must consistently apply the lowest:

  • issue credit rating awarded by the credit ratings agencies, whenever the individual ratings on a directly held debt investment, conflict. The issue credit ratings will be used for the purposes of reporting to APRA in item 1, column 8 on SRF 532.0.
  • issuer credit rating awarded by the credit ratings agencies, whenever the individual ratings on a counterparty to an over-the-counter derivative contract, conflict. The issuer credit ratings will be used for the purposes of reporting to APRA in item 4, column 2 on SRF 534.0.

 

 

FAQ 119: What process is involved when an RSE, defined benefit RSE, PST, ERF, SAF or SMADF is winding up, and which forms are required to be submitted as part of the wind-up return? (added 1 October 2014)
 
A: Sub-regulation 11.07(6) of the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations) requires an RSE licensee to give written notice to APRA of a decision or resolution to wind-up an RSE, defined benefit RSE, PST, ERF, SAF or SMADF. This notice must be given as soon as practicable after making the decision or resolution and before the winding-up has commenced, as required under r. 11.07(7) of the SIS Regulations.

APRA allocates the wind-up return upon receiving the written notice under r. 11.07(6) of the SIS Regulations and generates the return once the wind-up has occurred. To assist with this process, APRA requests that, as part of the written notice under r. 11.07(6) of the SIS Regulations, the RSE licensee provide the expected wind-up date to APRA. In addition, to ensure that the return can be generated on the correct date, APRA requests that further notification be provided to APRA of any changes to the expected wind-up date.

An RSE licensee to which Reporting Standard SRS 602.0 Wind-up (SRS 602.0) applies must submit Superannuation Reporting Form SRF 602.0 Wind-up in respect of the year of income of the RSE, defined benefit RSE, PST, ERF, SAF or SMADF within three months of the date that the entity has been wound up.

Wind-up returns will vary, depending on whether the entity is an RSE, defined benefit RSE, PST, ERF, SAF or SMADF. Please refer to Attachment A of SRS 602.0 to determine which forms are within the relevant wind-up return package.

 

 

 

FAQ 93: How should an RSE licensee interpret the depth of look-through reporting requirements within the investments forms and disclosure forms? (added 14 May 2014)
A: Subsection 13(4A) of the Financial Sector (Collection of Data) Act 2001 (FSCOD Act) establishes the requirement for an RSE licensee to provide to APRA information in relation to the investment of assets and any deductions (whether to cover fees, costs, taxes, or for any other purpose) from the return on investments made. In FAQs 37 and 66, APRA has clarified that, in practice, this involves looking through cascading entities to the first non-connected entity and reporting the ultimate asset allocation in which the investment is held, in addition to the investment performance of each investment vehicle which includes the associated fees, costs, taxes and other deductions.
Under Prudential Standard SPS 530 Investment Governance, an RSE licensee is required to determine appropriate measures, approved by the Board, to monitor the performance of each investment in each investment option and each MySuper product on an ongoing basis.
When placing funds with an investment manager, APRA encourages RSE licensees to obtain reporting from investment managers that permits the RSE licensee to form an adequate understanding of the drivers of investment performance, including deductions from gross return.
RSE licensees are also encouraged to make all reasonable efforts to obtain information about their investments beyond the first non-connected entity, as APRA is of the view that obtaining this information reflects sound investment governance. If an RSE licensee already receives this level of information in relation to its investments, it should make all reasonable efforts to continue to receive this in future. Where this level of information is available to an RSE licensee, it should be reported to APRA.

 

 

 

FAQ 75: How should an RSE licensee that currently uses an investment objective expressed as a percentile of the distribution (e.g. 25th percentile) report their return target on the MySuper product dashboard (per the requirements in Reporting Standard SRS 700.0 Product Dashboard (MySuper) (SRS 700.0))? (amended 11 August 2014)

A: APRA’s intent is that the return target is a forward-looking estimate of what the RSE licensee expects the MySuper product to earn over a 10-year period on average. In order to generate this type of estimate, an RSE licensee could apply a statistical distribution of future net returns above CPI growth with the mean of such a distribution to be used to estimate the net return. The mean is a standard statistical measure of the expected value of a distribution.

Some RSE licensees describe an investment objective to members as a percentile of the distribution rather than the mean. For example, an RSE licensee might currently describe an investment objective as “this investment option aims to earn CPI + 3% at least 70 per cent of the time”. However, APRA considers that a percentile is not an appropriate measure for the return target because there is not one particular percentile that is an industry standard, and the mean of a distribution is a commonly accepted definition of an expected value of a distribution.

In order to allow for consistent reporting across all MySuper products, and therefore aid the comparability of MySuper products, APRA requires the return target to be reported under SRS 700.0 as the mean annualised estimate of the percentage rate of net return that exceeds the growth in the CPI over ten years.

On 17 June 2014, ASIC issued Class Order 14/541 which deferred the operation of s.29QC of the Superannuation Industry (Supervision) Act 1994 (SIS Act) until 1 July 2015. This has since been deferred to 1 July 2016 by ASIC Superannuation (Amendment) Instrument 2015/396. For the avoidance of any doubt, the deferral of this section does not affect the operation of SRS 700.0 and Reporting Standard SRS 703.0 Fees Disclosed. Entities are required to continue reporting as per the instructions on these forms.

 

 

 

FAQ 118: How should an RSE licensee split dollar value and percentage value fees, costs and taxes when reporting on Reporting Form SRF 702.0 Investment Performance (SRF 702.0)? (added 1 October 2014)

A:  If some, or all, of the fee, cost or tax is charged as a dollar amount per member, report the dollar amount component of fees, costs and taxes in the relevant ‘dollar amount’ columns on SRF 702.0.  Do not also convert this amount to a percentage of member balance basis and report the converted amount in the relevant ‘percentage value’ columns on SRF 702.0.

If none of the fee, cost or tax is charged as a dollar amount per member, leave the ‘dollar amount’ columns on SRF 702.0 blank.

If some, or all of the fee, cost or tax is charged as a percentage of member balance, report the percentage value component of fees, costs and taxes in the relevant ‘percentage value’ columns on SRF 702.0.   Do not also convert this amount to a dollar amount on a per member basis and report the converted amount in the relevant ‘dollar amount’ columns on SRF 702.0.

If none of the fee, cost or tax is charged as a percentage of member balance, leave the ‘percentage value’ columns on SRF 702.0 blank.

 

 

 

FAQ 88: What does ‘gross of tax obligations’ mean in the instructions of SRF 703.0? (added 14 May 2014)

A: Fees and costs are to be reported on SRF 703.0 in a manner consistent with the way in which they are required to be disclosed in a Product Disclosure Statement.

In this context, ‘gross of tax obligations’ refers to the reporting of fees and costs gross of income tax, GST and stamp duty, as required under Schedule 10 and Schedule 10D of the Corporations Regulations 2001.

 

FAQ 89: My insurance administration fee is bundled with my insurance premium. How do I report on SRF 703.0? (added 14 May 2014)

A: Only explicitly charged insurance administration fees (completely separate to and not bundled with the insurance premium) are to be reported in item 1 on SRF 703.0.

APRA acknowledges that an insurance administration fee may not be explicitly charged, but instead bundled into the insurance premium. In such cases, APRA expects that the insurance premium (including the insurance administration fee) will be reported in item 6 on SRF 703.0 and insurance fee in item 1 will not be reported.

For the purposes of reporting on SRF 703.0, report insurance administration fees as ‘insurance fee’ in item 1. Do not report insurance administration fees as ‘administration fee’.

APRA will formally amend the SRF 703.0 instructions to reflect this position in due course.

 

FAQ 90: How are administration fee levels and investment fee levels for a lifecycle MySuper Product to be reported in item 3 and in item 4 respectively on SRF 703.0? (added 14 May 2014)

A: A: APRA has identified an error in the SRF 703.0 instructions to item 3 regarding administration fee levels associated with the administration fee exemption for employees of employer-sponsors under s. 29VB of the SIS Act and item 4 regarding investment fee levels of a lifecycle MySuper Product associated with s. 29VA(9) of the SIS Act.

The instructions for item 3 incorrectly require reporting of each level of administration fee level. The instructions should read report the highest level of the administration fee levels in item 1 and report the other administration feel levels in item 3.

The instructions for item 4 incorrectly require reporting of each level of investment fee for a lifecycle MySuper Product. The instructions should read report the highest level of the investment fee levels in item 1 and report the other investment fee levels in item 4.

The instructions will be amended in due course.

 

FAQ 91: How are performance fees to be reported in item 1 of SRF 703.0?  (added 14 May 2014)

A: Performance fees are to be included in the ‘investment fees’ category in item 1 of SRF 703.0 in a manner consistent with the way in which performance fees are disclosed in a Product Disclosure Statement (PDS).

ASIC expects performance fees to be aggregated with investment fees for disclosure purposes in a PDS, given that the definition of investment fees now includes performance fees.

   

FAQ 62: In the ‘Quality Control’ section of each reporting standard, there is reference to limited assurance audit requirements. However, Prudential Standard SPS 310 Audit and Related Matters requires some forms to be audited on a reasonable assurance basis. How should these provisions be read?

A: The purpose of the ‘Quality Control’ section in the reporting standards is to outline the minimum level of quality control to be provided in relation to those reporting standards. This purpose is reflected in the requirement that review and testing must be undertaken on ‘at least’ a limited assurance engagement. SPS 310 and the approved form of auditor report provide the more specific requirements by setting the detail of the audit scope; in particular, the requirement that an RSE licensee must ensure that a reasonable assurance audit/limited assurance review is undertaken in respect of the reporting standards listed in SPS 310 and in the approved form of auditor report.

 

FAQ 63: Is the RSE auditor required to review and test the RSE licensee’s systems, procedures and internal controls (refer to Prudential Standard SPS 310 Audit and Related Matters, paragraph 19(b)(ii)) or satisfy any of the other new audit requirements before the RSE licensee submits the first quarterly reporting forms to APRA?

A: As SPS 310 commenced on 1 July 2013, the requirement in paragraph 19(b)(ii) of SPS 310 applies only to the first annual reporting period ending 30 June 2014. While the reporting standards require the information submitted to APRA to be a product of the RSE licensee’s systems, procedures and internal controls, the combination of SPS 310 and the ‘Quality Control’ requirements in the reporting standards means that the audit requirements apply only in respect of the full annual reporting period ending 30 June 2014. APRA expects that RSE licensees will have internal processes in place to ensure the quality and accuracy of the data reported to APRA, but the audit of the processes is not required to be completed until the 2013-2014 year of income concludes.