[LINK] Data standards for superannuation

Tom Worthington tom.worthington at tomw.net.au
Fri Nov 12 09:29:07 AEDT 2010

The Super System Review Panel delivered its final report to the
Government on 30 June 2010. It recommended "electronic transmission of
linked financial and member data using standardised formats". This 
generated little interest in the media, but in a speech yesterday, the 
review chairman Jeremy Cooper is reported to have called for the 
government to enforce a standard as the superannuation industry has 
failed to implement one voluntarily:

The review recommendations, including data formats, are estimated to
cost $1 billion to implement, but will then save $1 billion per year
(The $20 billion prize: An industry blueprint to implement SuperStream,
Joint Financial Services Council and Ernst & Young research, August

 From Super System Review Final Report, Chapter 9:

     5.2 Standardising data transmission

     While some submissions argued that it is enough for the data to be
provided, a clear majority favoured mandating a uniform standard format
for delivery; that is, prescribing exactly the manner in which data is
required to be provided. While this would promote confidence and
clarity, the Panel is mindful of the cost involved in updating IT
systems and existing member details to comply with any proposed changes.

     Recommendation 9.4

     APRA should convene a stakeholder group including at least the ATO,
employers, payroll providers, super administrators and trustee
representatives to devise online forms covering all the common processes

     (a) the employer and the fund;
     (b) the fund and the member; and
     (c) different funds, such as occurs with ‘rollovers’.

     The Panel considers that such forms should be adopted by all
APRA-regulated funds, including for transactions involving rollovers to
or from SMSFs, by January 2012.

     There would also need to be standards applying to the wholesale
(peer-to-peer) transactions that occur from fund to clearing house,
clearing house to clearing house and clearing house to fund. ...

     6.2 Achieving e-commerce as the norm in superannuation

     The Panel is convinced that major cost savings are available in the
superannuation industry through a shift from the fragmented and largely
manual processing of member accounts, contributions and rollovers to a
standardised electronic approach.

     While attempts have been made to devise industry standards to
facilitate this, they have been voluntary and to date have failed due to
excessive complexity and low take up. The Panel notes the recent
announcement by three major fund administrators of agreement on a set of
principles to govern the electronic processing of rollovers between
participating funds. These are to be further developed consistently with
standards to be adopted by the Medicare Australia clearing house and
using an open governance structure along the lines of that provided by
the Australian Payments Clearing Association for banking.

     Many administrators and clearing houses already engage with payroll
providers to partially automate employer to fund transactions but, due
to the lack of common standards across the industry, these
     processes often require funds to provide specific software to large
employers and/or the application of proprietary middleware solutions to
convert the output from payroll providers into a format useable by the
fund administrator.

     The Panel believes that a key pre-condition to fully effective
e-commerce in super is the availability of a data base containing
accurate and secure details of all funds other than SMSFs. Details to be
incorporated would include, as a minimum, fund name, SPIN and bank
account details including name, BSB and account number. To avoid the
extraction of monopoly profits, this data base needs to be governed and
administered on a cost recovery basis, either by a collaborative
industry enterprise or by a government agency. Given that most of the
required data is already held by APRA, and that APRA already has
mechanisms for secure electronic communication with funds and the SBR
hub, the Panel considers that APRA is best placed to develop and
administer the data base.

     Recommendation 9.8

     Treasury should convene a working group comprising representatives
of relevant segments of the financial sector to devise the process for
development of SBR-compatible standards that provide for linked personal
and financial data transmission and facilitate related software
development. The standards should address transactions between employer
and fund, fund and member, and between funds.

     Development work should be financed through an industry levy.

     All administrators and clearing houses should be required to adopt
these standards as a licence
     condition. ...

     From: Super System Review Final Report, Chapter 9, Super System
Review Panel , 30 June 2010:

Tom Worthington FACS CP HLM, TomW Communications Pty Ltd. t: 0419496150
PO Box 13, Belconnen ACT 2617, Australia  http://www.tomw.net.au
Adjunct Senior Lecturer, School of Computer Science, The
Australian National University http://cs.anu.edu.au/courses/COMP7310/
Visiting Scientist, CSIRO ICT Centre: http://bit.ly/csiro_ict_canberra

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