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Phase 1 - Expenses, Asset Allocation, Insurance Arrangements and Fees and Costs - Frequently asked questions

Fees and Costs

1. How does the data collected via draft SRS 706.0 Fees and Costs Disclosed (draft SRS 706.0) compare to existing collections?

Data required by draft SRS 706.0 will expand fees and cost disclosures to choice offerings and provide key forward-looking drivers of member outcomes for all superannuation products. The enhanced data collection will collect updated fees and cost data to ensure that the changes to data required under ASIC’s “Regulatory Guide Regulatory Guide 97: Disclosing fees and costs in PDSs and periodic statements” (RG 97) are appropriately captured.

2. What if only one of an entity's products has opted into the new RG97 requirements, but the entity's other products have not?

Draft SRS 706.0 will allow reporting on the basis of both the current and updated version of RG97 for each fee and cost arrangement. Under draft SRS 706.0 RSE licensees are to report if the fee or cost arrangement is reported as per the 2017 or 2020 RG97 arrangements.  Please refer to the worked examples for further information.

3. What if we offer discounts to some employers?  Do these different fee arrangements have to be provided?

Yes, under draft SRS 706.0 each fee and cost arrangement scheme available for MySuper and choice product offerings are be reported. The number of employer sponsors, member accounts and customised features available to members under each scheme will also be required to be reported.

Where the same arrangements are offered to multiple groups of members, these may be reported as a single arrangement rather than once for each group. 

4. Does APRA expect fees and costs to be reported for all choice products? 

Yes, under draft SRS 706.0 APRA proposes to extend the reporting of fees and costs to choice products, capturing this data at the superannuation product, investment menu and investment menu level as appropriate. 

5. How does APRA intend to use the data collected via draft SRS 706.0?  

With draft SRS 706.0 APRA is addressing current data gaps in the reporting framework.  In addressing these gaps APRA, the industry and other stakeholders will be able to more easily assess member outcomes, industry operations and performance.   APRA will also use the data in its supervisory activities and share data with peer regulators such as ASIC.

6. How should fees and costs for defined benefit subfunds be reported via draft SRS 706.0?

As with other reporting standards proposed  for the Superannuation Data Transformation, defined benefit subfunds are to be reported separately as individual products.  Report fees and costs that are charged to members only.

7. Under draft SRS 706.0, how should fee changes be reported, is APRA expecting data to be updated if fees are changed?

Draft SRS 706.0 will be reported at least on an annual basis. Any fee changes are required to be reported no more than 28 days after their commencement.

8. Do rebates need to be reported?

Yes, under draft SRS 706.0, APRA is proposing that all fee rebates are required to be reported. An example of how fee rebates are to be reported is provided in the worked examples.

9. Some discounted fee structures exist for corporate superannuation plans that are not detailed in a PDS.  Such arrangements may be subject to confidentiality clauses in contracts with employers.  Are such fee structures required to be reported?

Yes, under draft SRS 706.0, APRA is proposing that all standard and customised fee structures are required to be reported. An example of how fee rebates are to be reported is provided in the worked examples.  Any concerns with confidentiality of some or all of the data should be raised in your written response to consultation.

10. Are RSE licensees required to report the fees and costs charged to members from accessible financial products offered on platforms? RG97 does not require these fees and costs to be reported in the platform PDS.
 

If the accessible financial products offered on platforms are managed investment schemes or other investment pools, should these fees and costs be reported on a "super equivalent" basis as expected by ASIC when providing examples of the combined effect of the fees and costs of both the platform and of the underlying accessible financial products for superannuation platform products.

Yes, under draft SRS 706.0, APRA is proposing that all standard and customised fee structures are required to be reported, this includes fees and costs that relate to accessible products available on platforms.

For a superannuation platform, the fees and costs for the accessible financial product should be reported using the fees and costs categories for a superannuation product (even if the accessible financial product is a managed investment scheme or other investment pool).

Under draft SRS 706.0, fees and costs should be reported to capture the experience a member will have when engaging in products, investment menus and investment options. 

While fees and costs that relate to accessible products available on platforms are not required to be published in a fund's PDS, APRA still expects that RSE licensees would be monitoring all fees and costs that are charged to their members as part of their considerations of their suitability and of the outcomes provided to members.

11. Does "Advice" included in Table 2 of draft SRS 706.0 refer to Advice fees as referred to in the previous version of RG97 (released in March 2017)?

Yes, the updated version of RG97 has transitional arrangements that enable RSE licensees to opt into the updated version until 30 September 2022. To address the changing status, draft SRS 706.0 allows reporting on the basis of both the current and updated version of RG97 until RG97 is fully implemented.

12. What is the difference between 'indirect costs' and 'ICR'?

The expectation is that 'ICR' would be used when reporting under the 2017 version of RG 97, whereas 'indirect costs' would be relevant only when reporting under the 2020 version.

Insurance

General

1. How does the data collected on draft SRS 251.0 Insurance (SRS 251.0) compare to existing collections?

Under draft SRS 251.0, APRA proposes to collect more granular data than is available under the current reporting framework to enable better understanding and assessment of insurance arrangements, coverage of policies, linkages to superannuation products, member insurance choice, claims processing experience, TPD assessment, and premiums charged.

2. Why is APRA requesting the back history of claims and premium data back 10 years.  This is longer than the 5 years that is required in SPG 250?

APRA is requesting 10 years of historical claims and premiums paid data in order to provide richness to its analysis of the outcomes provided to members.

3. Does the proposal to collect 10 years of historical premiums and claims data noted in 'Topic Paper 6: Insurance Arrangements' just apply to the collection of pilot data or after 'SRS 251.0' has been finalised and commenced?

The proposal to collect 10 years of historical premiums and claims data would apply for when data is collected after the final standards have been released and reporting standard SRS 251.0 Insurance Arrangements has commenced (i.e. the proposed first submission of data for the 30 June 2021 data would be due in September 2021). 

4. In cases where there have been mergers between funds or successor fund transfers does the proposal to collect 10 years of historical premiums and claims data noted in 'Topic Paper 6: Insurance Arrangements' apply in cases where a fund may have been in existence for less than 10 years?

The proposal to collect historical premiums and claims data would apply for the life of the fund or product.   In the case of mergers, successor fund transfers or product restructures and historical data was not available from successor funds, APRA is open to discuss options available for affected entities on a case by case basis.

5. How does APRA intend to use the data collected via draft SRS 251.0?  

Data collected via draft SRS 251.0 will be used by APRA to inform its supervisory activity and efforts to improve outcomes for members in the superannuation industry.  It will also enable APRA to focus supervisory intensity where the insurance arrangements provided by RSE licensees may not be consistent with the reasonable expectations of their members or where improvements in the insurance arrangements are needed.

6. Is the concept of an insurance cluster the same as provided in SRS 250.0?

Yes, the concept of an insurance cluster the same as provided in SRS 250.0.  The reporting instructions for each of the tables under draft SRS 251.0 provide further detail on how insurance clusters are to be reported.

7. Under draft SRS 251.0 is there a significance threshold, or are all insurance arrangements to be reported?

Under draft SRS 251.0 all group policies will be reported on individually rather than clustering smaller policies.

8. Under draft SRS 251.0 are self insurance arrangements to be reported?

Under draft SRS 251.0 self insurance arrangements will not be reported. The draft reporting standard relates to acquired insurance only, which is currently collected in SRF 250.0. It does not cover self-insurance, which is currently collected in SRF 161.0.  The data collected under SRS 161.0 is not in scope for this phase of the project and will be examined in Phase 2.  

Draft SRF 251.0

9. For the item 'number of policies in cluster' (draft SRF 251.0 table 1 column 7), are we to report the number of member accounts within each cluster or number of policies within each cluster?

Table 1 of draft SRF 251.0 collects information for each group policy held by the RSE as well as individual policies made for individual members.  To simplify reporting of individual style polices, it will be permissible to collate reporting of individual-style policies that have a common insurer together as a cluster.  Please report the number of policies within the cluster for this item.

10. For SRF 251.0 table 1, are underwritten policies to be counted as separate policies?

It would depend if the member is under the same policy or not.  For example, if a member is covered under a group policy but just requires additional underwriting to obtain cover,  APRA would not expect this to be reported as a separate policy.

If a member requires additional underwriting and ultimately ends up with a new individual policy, this would need to be reported as an individual policy or cluster of individual policies.

Draft SRF 251.1

11. What is meant by the table heading 'Member insurance choice' in table 2 of draft SRF 251.1?

Data in this table has been designed to better understand the decisions members make in relation to their insurance.

Within this table, column 3 indicates the level of insurance that the a member would have should they have made no election regarding insurance, whereas column 4 indicates the members 'current' level of cover (as at the reporting date). Columns 5 and 6 collect a count of the number of members and their aggregate cover for each unique combination of columns 1, 2, 3 and 4.

The aim is to capture member decisions - so a member that was not provided with cover upon joining, but now has cover after reaching age and balance thresholds (and without making an election to obtain such cover) should be counted as a 'Yes' in column 3. Similarly, a member that was provided with cover upon joining, but subsequently had their cover removed (e.g. as a result of Protecting Your Super package of reforms) without making an election regarding their insurance would be counted as a "No' in column 3.

12. For the item 'Default cover offered' (draft SRF 251.1, table 1 column 4), are responses to be broken down between ‘YES’ for members who have insurance by default  and ‘NO’ where members have had to opt in (i.e. not in the product by default, but rather have opted in)?

Table 1 collects information for each insurance offering that is available to members within each product within an RSE.  For this item, report 'yes' for 'Default cover offered' for any insurance offerings that may be provided to members without them applying for such cover.  The 'number of members with insurance cover' (Draft SRF 251.1 table 1 item 5) refers to the number of members with the product that hold any amount of cover within that insurance offering, whether or not they applied for it.  

13. Should 'No' for the item 'default cover offered' (draft SRF 251.1 table 2, column 3) be selected if any members have moved away from the default level of cover?

See response to question 10 above.  Column 3 refers to whether the member would have the relevant type of cover today should they have made no elections in regards to their insurance.  'No' could be a valid response whether or not the member has subsequently made a decision regarding their insurance.

Draft SRF 251.3

14. Why is APRA requesting the insurance premiums for all ages for all policy groups?

SRS 703.0 currently requires entities to provide sample premiums for policies providing cover to MySuper members aged 30 and 50.  Under draft SRS 251.0 premiums for all ages for which cover is provided are required to be reported for all group policies utilised within the RSE. 

The proposals in draft SRS 251.0 will provide granular data on the overall insurance arrangements as a step towards a detailed member level data collection and will facilitate an improved understanding of the nature and value of insurance provided through superannuation and assist RSE licensees in appropriately considering the insurance outcomes for their members when entering into an insurance arrangement. 

15. How does APRA expect an entity to categorise their occupation ratings into the categories provided in draft SRS 251.0

Through draft SRS 251.0 APRA looking the use of six occupation categories to describe the type of occupation covered by the policy.  RSE licensees would answer Yes for one or more occupation categories that would overlap with the RSE's occupation definition.

16. Why has APRA set out worker categories in draft SRF 251.3?

The current worker category information collected via SRS 703.0 uses a free text field that does not readily enable comparison or consistency.

17. Does the table 'insurance premiums' (draft SRF 251.3 table 2), relate only to income protection insurance?

Table 2 of draft SRF 251.3 covers all insurance types.  The details of each premium charged for each insurance table defined in table 1 of draft SRF 251.3 are to  be reported on this table.

18. For the item 'age' (draft SRF 251.3 table 2 column 3) is it possible to report age-bands (i.e., 11-20, 21-30 and so on) and if yes, please indicate the age bands APRA will expect or are we to report actual age?  If yes, age as at what date in time?  

In draft SRF 251.3 individual ages (as at last birthday) are to be reported for this item.  

19. What is APRA expecting to be reported in the 'Finalised - other' bucket for 'Claim assessment' (draft SRF 251.2. table 4, column 4)?

This item captures instances where the insurer has made a decision on a claim, but does not meet the definition of 'Admitted' or 'Declined' detailed in SRS 101.0.

Expenses

1. How does the data collected on draft SRS 332.0 Expenses (draft SRS 332.0) compare to existing collections?

Under the current superannuation data collection framework expense reporting is provided through the collection of data relating to services and the financial statements (Statement of Financial Performance) at the RSE level.

Under draft SRS 332.0 all expenses incurred by RSE licensees and RSEs will be required to be reported under a new reporting standard dedicated to expenses. This will ensure that all expenses incurred by RSE licensees and RSEs will be collected by APRA.

2. How does APRA intend to use the data collected via draft SRS 332.0?

Draft SRS 332.0 addresses current gaps in APRA's superannuation data collection on expenses and will provide data that is more granular. In addressing these gaps APRA, the industry and other stakeholders will be able to appropriately assess member outcomes, industry operations and performance. APRA will also use the expense data in its supervisory activities.

3. How does APRA intend to publish this data, will all data be released publicly?

APRA proposes to determine under section 57 of the APRA Act that all data collected under draft SRS 332.0 is non-confidential. Publically releasing draft SRS 332.0 data at an entity level will provide necessary information on expense reporting to allow APRA, other regulators and industry stakeholders to understand and assess RSEs that may require increased supervision. Feedback is welcome on the approach to non-confidentiality as industry has expressed concern about the commercial sensitivity to the data that will be provided.

The pilot data how will be treated as confidential and will not be used in any publication.

4. What types of expenses should be included in the expense group 'Other'?

If there are expenses that cannot be grouped into one of the expense group listed, then these expenses can be included in the 'Other' category. If there are expense groups that could be added, then please provide comment in your consultation submission and if additional expense groups should be considered.

5. What types of expenses should be included in the expense type 'Other'?

If there are expense types that cannot be grouped into one of the expense types listed, can be included in the 'Other' category. If there are expense types that could be added, then please provide comment in your consultation submission and id additional expense types should be considered.

6. What is the materiality threshold that should be used for draft SRS 332.0?

Expense reporting does not currently have any materiality thresholds but APRA welcomes feedback on the application of materiality thresholds and the impact that this would have on the granularity of the data provided.

For the purposes of the pilot data collection, a materiality threshold can be applied of either 1% of total expenses, or $5000 per expenses. We would request that commentary is provided on the impact that this materiality has had on the data provided. If there are other approaches to materiality that would facilitate the provision of pilot data, then please contact us.

7. Why is APRA using its look through powers for expense reporting?

APRA is using its look through powers for expense reporting so that expenses that the RSE licensee, RSE, ERF or DB RSE incur with service providers will be captured within the data collection. These expenses should be reported through the look through chain with the final service provider detailed.

8. Why is draft SRS 332.0 being aligned to financial statements?

Draft SRS 33.20 is being aligned to financial statements to ensure that there is consistent reporting and all RSE licensees are providing data that aligns with data that has already been reported and is available to members.

This will mean that the reporting period for the pilot data, as at 30 June 2019, will allow reporting to be provided for the financial statements for this period.

9. What happens if the year end for an RSEL, RSE, ERF or DB RSE is not at 30 June?

For the purposes of the provision of pilot data the data can be provided as at the year end that is available.

10. Should ERFs be included in expense reporting?

Yes. ERFs should be included in expense reporting. The data collection caters for RSE licensee, RSE, ERF and DB RSE reporting.

11. With respect to confidentiality, what is APRA's stance and will you look to publish this data, much of which is sensitive and confidential?

The pilot data collected in this consultation will not be published and is solely for the purpose of evaluating the ability of the structure and data items at meeting the objectives set out by the program. With respect to the final reporting standards, as with all of the other topics addressed by the SDT program APRA is starting at a position of non-confidentiality and ascertaining from entities where confidentiality concerns apply. In cases where items are agreed to be confidential and individually identifiable when published, masking processes can be applied to such items as is currently done in a number of APRA publications.

12. Is a response to this consultation mandatory?

No, responses are voluntary. Given the volume and granularity of the data collection and the bearing it will have on the supervisory activity and publications of APRA, entities are strongly encouraged to participate to the extent that is feasible to ensure their perspective and the challenges unique to their organisation are voiced.

13. What is the due date for pilot data and responses to consultation on the Expense Reporting topic?

Responses and pilot data are due by the 30th of October.

14. How should credit card expenses be treated? The expenses that are paid through credit cards are not included in the general accounting system?

For the purposes of the provision of pilot data, credit card expenses can be included in the expense group 'Other' and the expense type 'Other'. APRA understands that there will be considerable work to sort these expenses into the buckets that are required, however given these expenses should be captured in the Statement of Financial Performance it is proposed that they will be required to be reported in the formal data collection.

15. There seems to be some expense types that have bee excluded from the data collection, this includes; tax and industry body fees. Have these been excluded intentionally?

One of the purposes of the collection of pilot data is to highlight any areas of the draft reporting standard that can be enhanced. APRA welcomes feedback on additional expense types that should be added.

16. How should depreciation be treated?

Depreciation is an expense and so should be included in draft SRS 332.0 pilot data. For the purposes of the provision of the pilot data depreciation expenses should be included in expense group 'Other' and expense type 'Other' and commentary provided with the submission on the approach taken.

17. The expense data that is proposed to be collected in draft SRS 332.0 is broader than what is proposed to be provided to members at an annual general meeting through the recent budget announcements. For the annual general meeting it is proposed that information is provided on:
- marketing expenditure
- political donations
- sponsorships
- payments to industry bodies or trade associations
- payments to related parties
Why is the APRA reporting more detailed?

APRA expense reporting will capture all expenses that has been incurred and is not limited to expenses that need to be communicated to members at the annual general meeting. The expanded data collection will provide a full picture of expenses across the industry.

Asset Allocation

General

1. How does the data collected on draft SRS 550.0 Asset Allocation (draft SRS 550.0) compare to existing collections?

The data collected on draft SRS 550.0 is very similar to a number of existing collections, with a few key differences. These include expansion of collection from MySuper products to all investment options, more granular asset class categorisations, collection of synthetic exposure figures, and restructuring the collection of currency exposure levels set at the investment option level. More information regarding these changes and other small adjustments can be found in the Asset Allocation Topic Paper on the Superannuation Data Transformation website.

2. We have 150 investment options, do we have to report them all?

Yes, with the exclusion of:

  1. investment options which have been aggregated as permitted in Item 3 of draft SRF 605.0 RSE Structure (draft SRF 605.0);
  2. investment options which are reported on draft SRF 605.0 under investment option category Annuity.

3. How does APRA intend to use the data collected via draft SRS 550.0?

Data collected via draft SRS 550.0 will be used by APRA to inform its supervisory activity and efforts to improve outcomes for members in the superannuation industry. It will also enable APRA to focus supervisory intensity where the asset allocation levels provided by RSE licensees may not be consistent with the reasonable expectations of their members or where improvements in the asset allocation levels are needed.

4. How does APRA intend to publish this data, will all data be released publicly?

APRA proposes to determine under section 57 of the APRA Act that all data collected under draft SRS 550.0 is non-confidential. Publically releasing draft SRS 550.0 data at an entity level will provide necessary information on expense reporting to allow APRA, other regulators and industry stakeholders to understand and assess RSEs that may require increased supervision. Feedback is welcome on the approach to non-confidentiality as industry has expressed concern about the commercial sensitivity to the data that will be provided.

The pilot data will be treated as confidential and will not be used in any publication.

5. Is a response to this consultation mandatory?

No, responses are voluntary. Given the volume and granularity of the data collection and the bearing it will have on the supervisory activity and publications of APRA, entities are strongly encouraged to participate to the extent that is feasbile to ensure their perspective and the challenges unique to their organisation are voiced.

6. Is a growth/defensive metric included in this consultation?

No. As is evident from the content of the reporting standards and topic paper, the collection of a growth/defensive metric is not included in any of the tables and is out of scope for the topic. While growth/defensive methodologies may make use of this data, the purpose of the reporting standard and this consultation is to accurately capture the investment strategies and exposures each fund employs and engages in, and as such attain feedback on the categories and definitions used. As stated in the topic paper, APRA has been engaged with the working group of industry participants who have been consulting on this area and will take their findings into consideration in future growth/defensive work.

7. Custodians will be heavily involved in producing data for our submission, are they welcome to submit feedback to the consultation?

Yes. APRA is interested in the perspectives of all parties to which the new reporting standards will impact and taking their feedback into consideration.

8. Many funds will be reporting the same managed fund options, e.g. the Magellan Global Fund. Can APRA not collect this information a single time from the fund managers instead of each super fund individually?

FSCODA does not extend to managed fund providers and thus APRA has no basis upon which to consistently attain accurate and timely information from these entities. Additionally, it's an expectation that trustees in performing their role have sufficient information on hand regarding all investment options available in their products.

9. What is the due date for pilot data and responses to consultation on the Asset Allocation topic?

Responses and pilot data are due by the 30th of October.

Strategic Asset Allocation

10. If currency hedging targets are not set at the investment option level, rather the asset class level, should anything be reported using the "currency exposure" strategic sector?

No. The "currency exposure" high level strategic sector is only used to capture currency hedging targets set at the investment option level. Currency hedging targets set at the asset class level should be reported in the "Currency Hedging Ratio" column for its respective asset class.

11. Do investments reported using the “currency exposure” high-level strategic sector count towards the total benchmark allocation for the investment option?

No. Benchmark allocations using the “currency exposure” high-level strategic sector captures the target proportion of the investment option’s assets which are internationally domiciled and do not intend to have the currency exposure hedged from it. Those unhedged assets should have their benchmark allocations also included in allocations to the high level strategic sector which reflects the nature of the investment.

12. Does low-level strategic asset allocation (draft SRS 550.0 Item 2) need to be reported for all investment options?

Yes. However, if there is no further granularity required beyond the high-level strategic asset allocation reported in draft SRS 550.0 Item 1 to accurately describe the SAA of the investment option, then report "No" in column 4 of Item 2 for the investment option.

13. What is the purpose of the low-level strategic asset allocation and in what situations should a low-level strategic asset allocation be reported.

APRA recognises asset allocation decisions are made in a variety of ways between funds. Capturing this information in a way which is both accurate to the allocation decisions made and comparable between funds is a challenge. APRA understands that funds may set strategic asset allocation levels using more granular strategic sectors than those which are offered or may set sub-targets in addition to their high-level strategic asset allocation. The low-level strategic asset allocation allows entities the opportunity to provide this further granularity in such cases. Accordingly, a number of high-level strategic sectors, such as Credit/Fixed Income, are broken down into subsectors to allow for this. Another scenario might include a high-level allocation to property broadly, which can be broken down into sub-targets of listed and unlisted property assets and/or Australian and International assets.

14. Could an emerging markets subcategory be added to the Strategic Asset Allocation collection?

At this stage of the consultation no fundamental changes to the structure will be made, including the addition of new variables. However feedback on further variables required to accurately describe relevant characteristics of allocations is sought and will be considered for the final standards. With respect to emerging market investments specifically, as this is a level of granularity some entities are specifying in their strategic asset allocations and given this is a flag captured in the actual asset allocation collection (under International Economy Type) we are anticipating this will be added to the final reporting standards.

Actual Asset Allocation

15. How should investments be aggregated in draft SRS 550.0 Item 3 and draft SRS 550.1 Item 1?

Investments should only be aggregated where they share the same combination of descriptive properties and belong to the same investment option (of the same investment menu and superannuation product).

16. How should investments currently reported using the 'Other' asset class in the SRS 530 series be reported?

Such investments should be reported using the 'Alternatives' strategic sector, as per its definition. If none of the asset class characteristics within this strategic sector appropriately define the investments, the 'Other' asset class characteristic should be used. Further information regarding the nature of these investments should be provided with pilot data submission.

Currency Exposure

17. Do values for all international currencies need to be reported on draft SRS 550.1 Item 2?

Only currencies in which the fund has exposure need to be reported.

Worked examples 

Published 27 October 2020

Published 27 October 2020

Published 27 October 2020

Published 27 October 2020

Published 27 October 2020