Superannuation Data Transformation publications and confidentiality consultation

To: Registrable Superannuation Entity licensees

APRA is consulting on proposals for the publication of certain data, and on proposals to determine as non-confidential certain data under reporting standards SRS Expenses (SRS 332.0), SRS 550.0 Asset Allocation (SRS 550.0), SRS 605.0 RSE Structure (SRS 605.0) and SRS 606.0 RSE Profile (SRS 606.0). This consultation seeks to provide RSE licensees and other interested stakeholders with an opportunity to comment on proposals for the publication and the confidentiality of the data reported. 

The consultation outlines APRA’s proposals for publication and confidentiality positions for expenses and detailed asset allocation data that was previously under best endeavours reporting, as well as some new data relating to investment option characteristics and fee arrangements introduced into the reporting standards as part of SDT Phase 1.¹

APRA is also consulting on a consequential amendment to the definition for executive remuneration expenses following the Treasury Laws Amendment (Financial Reporting and Auditing of Registrable Superannuation Entities) Regulations 2023 (the Financial Reporting Regulations) which came into effect on 1 July 2023.

Background

In APRA’s March 2023 response to consultation on minor amendments to SDT Phase 1 reporting standards, APRA outlined its intent to consult later in 2023 on the confidentiality and publication of:

• expenses under SRS 332.0; 
   
• asset class characteristics 1, 2 and 3 under SRS 550.0; and
   
• new reporting columns introduced under SRS 605.0 and the fees and costs arrangements tables under SRS 606.0.

Proposals for publication

APRA’s starting position is to publish as much data in the collections as possible. Through the consultation process, APRA will work closely with industry as it considers narrowing the scope of the publication and confidentiality proposals in response to the feedback it receives. 

APRA is proposing to publish the following additional data (See Appendix 1 for details):

• new industry aggregate and fund level data on fund expenditure;
   
• new industry aggregate and fund level details on investments by detailed asset class characteristics; and
   
• new investment option classifications and the number of members under the standard fee arrangements to be included in APRA’s Quarterly Superannuation Product Statistics. 

APRA has included mock-ups of the proposed new publication tables as an attachment to this letter (Attachments A and B).

Proposals for confidentiality 

APRA proposes to determine most, but not all, of the data as non-confidential. Data that APRA determines to be non-confidential may, when published, identify individual entities but will not breach the privacy of individual fund members. This proposal is in line with APRA’s objective of improving transparency, particularly where there is a strong public interest in publishing comparable data or where data is already published in the public domain (e.g. financial statements).

Details of the proposed confidentiality positions are outlined in Appendix 2, and APRA has included a visual representation of the confidentiality proposals for each table in the reporting standards in Attachment C.

Summary of proposals  

Consequential amendment to definition of Executive Remuneration

The Financial Reporting Regulations came into effect on 1 July 2023. 

APRA proposes to amend the definition for executive remuneration in SRS 101.0 for the purpose of reporting under SRS 332.0. The proposed update will align with the new requirements for disclosure of executive remuneration under the Corporations Act 2001 which came into effect 1 July 2023. 

Executive Remuneration (engagement type):

“For reporting periods before 30 June 2024, has the meaning as in section 29QB(1) of the SIS act”.

“For reporting periods ending on or after 30 June 2024, means remuneration paid to Key Management Personnel, excluding Directors. Key Management Personnel has the meaning in Australian accounting standard AASB124”.

Request for feedback

APRA welcomes both formal submissions and the opportunity to meet with RSE licensees and other stakeholders during the consultation period. 

This consultation satisfies APRA's obligation to consult "interested parties" under section 57(3) of the APRA Act. Submissions regarding the confidentiality proposals will be considered by an APRA delegate to determine whether a non-confidentiality determination ought to be made over this data. 

APRA will hold two roundtable discussions in October 2023 with RSE licensees and non-RSE licensee stakeholders. To register for these roundtables, please email superdatatransformation@apra.gov.au. 

Written submissions from other industry stakeholders should be emailed to superdatatransformation@apra.gov.au and addressed to: General Manager, Macro and Industry Insights.
Information about the aspects of the proposals for which APRA seeks feedback, and the details to include when providing a submission is outlined in Appendix 2. Without limiting the matters that RSE licensees or interested parties may address in their submissions, APRA has outlined information that would assist APRA in determining whether or not a non-confidentiality determination ought to be made over this data if included in submissions.

A summary of the consultation schedule is included below: 

Yours sincerely,

Adam Cagliarini
General Manager
Macro and Industry Insights

Important disclosure requirements – publication of submissions 
 

All information in submissions will be made available to the public on the APRA website unless a respondent expressly requests that all or part of the submission is to remain confidential. 

Automatically generated confidentiality statements in emails do not suffice for this purpose. 
Respondents who would like part of their submission to remain confidential should provide this information marked as confidential in a separate attachment. 

Submissions may be the subject of a request for access made under the Freedom of Information Act 1982 (FOIA). APRA will determine such requests, if any, in accordance with the provisions of the FOIA. 

Information given to APRA in any submission in relation to the affairs of APRA-regulated entity that is not in the public domain will be “protected information” for the purposes of section 56 of the Australian Prudential Regulation Authority Act 1998.   

Appendix 1: Proposals for publication 

Expenses

APRA propose to publish expenses at an industry and fund level from mid-2024 as outlined in detail below. To facilitate this, APRA also proposes to determine the majority of the data items collected under the re-determined SRS 332.0 as non-confidential. Details of the confidentiality positions are outlined in Appendix 2. 

Administration and other expenses by expense type 

APRA is proposing to publish total industry expenses by each category and by insourced, related outsourced and non-related outsourced arrangements for the industry for administration and operating expenses.

APRA proposes to publish fund level data on total expenditure for each combination of all expense types, expense group types and service arrangement engagement types reported in SRF 332.0 Table 2 Administration and other expenses. 

Feedback on this area from previous consultation was mixed. Some noted the value in disclosing costs associated with individual service providers, as these costs have a significant impact on outcomes provided to members and transparency in this area will help identify inappropriate expenditure out of step with member expectations. Other stakeholders emphasised commercial and member detriment arising from the release of commercially sensitive data that may be subject to confidentially agreements. Stakeholders argued that this would be of detriment to members as service providers may not want to provide services to superannuation funds if their confidential pricing data would be made public. 

APRA considers that the publication of total expenses by expense type is of strong public interest. APRA has published fund level data on expense categories (SRS 330.0 Statement of Financial Performance) for several years. In addition to this, funds disclose total expenditure on some expense types in their financial statements, for example External Audit. Additionally, many of the proposed expense types relate to the overall running of the fund rather than specific service arrangements.

Investment expenses classifications

APRA is proposing to publish total industry aggregate expenses by each category for investment management expenses.

APRA is proposing to publish fund level data on total investment management expenses by expense type. 

In previous consultation, for investment management expenses, some stakeholders asserted that the publication of the investment asset class sector type could allow users to cross-reference the data published by APRA with already publicly available information about funds’ investment managers to determine the cost of individual service arrangements.

Consistent with the feedback received, APRA is not proposing to include the breakdown by investment asset class sector type.

Reporting by payee or service provider for expenses of increased public interest

APRA is proposing to publish total expenses for promotion, marketing and sponsorship, remuneration, related party payments, industrial body payments and political donations, by payee or service provider. These specific expenditures are of increased public interest, and this information is already required to be publicly disclosed for each RSE under the Superannuation Industry (Supervision) Amendment (Annual Members’ Meetings Notices) Regulations 2022. 

APRA is proposing to include an indicator of whether the expense is a related party expense or whether the expense is to an industrial body or promoter, and the reported expense type in each of the proposed tables. This will allow users to identify any expense which are classified in more than one of these expense categories.

APRA also proposes to publish a summary of total expenditure on director remuneration and executive remuneration for each fund.

Expense margin contribution to related service provider profit

APRA is proposing to publish data for each fund on the total expense margin contribution to related party service providers profit (reported in SRS 332.0 Table 4 Related Party Reporting) by service provider. In response to feedback received from industry stakeholders that there was a need for users of the data to be able to easily identify cases where any expense margin contribution to profit would be passed back to members, APRA proposes to segment the data by the type of relationship with the service provider, e.g. wholly owned subsidiary, partly owned subsidiary, parent or group company and other relationship. 

The mock-up of APRA’s publication proposals for expenses are in Attachment A.

Asset Allocation 

APRA is proposing to expand the total industry data on investments published quarterly over time to include additional industry aggregate date on investments in asset sectors of: 

• Property and infrastructure by sector classifications, ownership model and development stage;
   
• Alternative strategy funds by strategy type; 
   
• Listed equity by market capitalisation type and active/passive management; 
   
• Private equity by development stage and strategy type. 

APRA is also seeking feedback on benefits or detriment from the publication of fund level and/or investment option level data on investments by the detailed asset class characteristics listed above as part of datasets which APRA intends to release in the future. 

In line with APRA’s final position on publication of other investments data, APRA would publish any fund or investment option level data on at least a 90-day lag to provide transparency while reducing market sensitivities. APRA welcomes feedback on this or any other mechanisms to reduce market sensitivities.

The mock-up of APRA’s publication proposals for asset allocation are in Attachment B.

Structure and profile

APRA is proposing to include the new investment option classifications of internally managed, externally managed - connected entity and externally managed - non-connected entity in APRA’s Quarterly Superannuation Product Statistics.

APRA is also proposing to publish the number of members under the standard fee arrangements in APRA’s Quarterly Superannuation Product Statistics. 

Appendix 2: Proposals for confidentiality 

APRA is consulting on proposals to determine certain data non-confidential. In considering whether it is appropriate to make a non-confidentiality determination over data that has been reported to APRA, APRA will consider the benefit to the public from the disclosure of the data in the reporting document and whether the public interests of such disclosure outweighs any detriment to commercial interests that such a disclosure may cause. 

APRA is aiming to maximise publication of data as more data is collected, promoting greater transparency in the superannuation industry in line with APRA’s objectives.² In turn, this will support competition, contestability and efficiency in the financial system and facilitate innovative uses of data. To enable the publication of data as outlined in Appendix 1, APRA is proposing to determine the majority of data reported under superannuation reporting standard SRS 332.0, and the majority of new items introduced under SRS 550.0, SRS 605.0 and SRS 606.0 non-confidential. APRA’s confidentiality positions are outlined in Attachment C.

Additional benefits include:

• Informing the public: publishing more of the data APRA collects will generate greater consumer understanding, transparency and more informed public discussion and decision-making of superannuation-related issues.
   
• Influencing by comparison: promote better practices through comparability and peer review, facilitating analysis and understanding of observed trends and maintaining confidence in the Australian financial system.
   
• Driving accountability: encourage RSE licensees to act with discipline and encourage better, more efficient market behaviour.
   
• Enhancement of APRA’s use of data to identify areas for increased supervisory attention. 

Feedback sought on confidentiality proposals

In line with APRA’s obligations under subsection 57(3) of the APRA Act, APRA is providing RSE licensees and other interested parties with an opportunity to make representations as to whether the reporting documents that are proposed to be declared non-confidential contain confidential information. 

Without limiting the matters that RSE licensees or interested parties may address in their submissions, it would assist APRA if submissions included: 

1. specific reference and details of the data items or dimension classifications that should be determined non-confidential (which are not proposed to be determined non-confidential by APRA or are of particular significant for public benefit); 
    
2. the benefit stakeholders would derive from making that data item public (both in aggregate and at fund-level or product-level);
    
3. specific reference and details of the data items that should remain confidential (if any); 
    
4. information on how the disclosure of that information would lead to detriment to member interests, and the extent to which that could occur; and/or 
    
5. specific examples of how the disclosure of that information might lead to detriment to RSE licensees or other parties’ commercial interests.

An outline of the confidentiality proposals for each topic is provided below, and details of the proposed confidentiality positions are provided.

Expenses

APRA proposes to determine the majority of the data items collected under the re-determined SRS 332.0 as non-confidential. APRA acknowledges that some stakeholders have made submissions in previous consultations to make certain data items under the SRS 332.0 collection, confidential. Due to the amendments made to SRS 332.0 since the 2022 consultation, APRA is required to consult to enable all interested parties to respond to proposals based on the revised structure of the collection. APRA has considered feedback provided in prior submissions into account when assessing the benefit and any potential detriment of making the data non-confidential as part of the consultation proposals.

Table 1: payee or service provider 

In line with the publication proposals for reporting by payee or service provider for expenses in the public interest, APRA is proposing that all data reported in SRF 332.0 Table 1 Payees and service provider be determined non-confidential for payee IDs where:

• The service provider type in Table 1 is Industrial Body or Promoter;
   
• The payee ID is reported in Table 2 or 3 when:

  ―    Related party indicator of Yes;
  ―    Expense group type of Marketing;
  ―    Expense type of Political Donations or Director Remuneration; and / or
  ―    Service Arrangement Engagement Type is Executive Remuneration or Donation To Political Party; and/or
   

• The payee ID is reported in Table 4, column 3.

APRA is proposing that the following data be determined non-confidential:

• all data reported in SRF 332.0 Table 2 Administration and other expenses reporting be determined non-confidential.
   
• all data reported in SRF 332.0 Table 3 Investment management expenses with the exception of Investment Asset Class Sector; Investment Listing; Investment Domicile; and Asset Class Description be determined non-confidential.
   
• all data reported under SRF 332.0 Table 4 Related Party Reporting be determined non-confidential.

Asset Allocation 

APRA is proposing to determine as non-confidential Asset Class Characteristic 1; Asset Class Characteristic 2; and Asset Class Characteristic 3 classifications that were previously not determined as non-confidential relating to:

• Property and infrastructure sector classifications, ownership model and development stage;
   
• Alternative strategy funds strategy type; 
   
• Listed equity market capitalisation type and active/passive management; and
   
• Private equity development stage and strategy type.

All data classifications would be therefore be determined non-confidential for:

• Investment options in SRF 550.0 Table 2 Actual asset allocation columns 7 – 9; and
   
• for the fund in SRF 550.1 Table 1 Investments, columns 6 – 8 

APRA seeks feedback on:

• the benefits of making public, any or all of the proposed asset class classifications data for property, infrastructure, alternatives, and equity asset class sectors at the fund level and/ or investment option level; and
   
• any examples of how the disclosure of that information would lead to detriment to member interests; or RSE licensees or other parties’ commercial interests.

Structure and profile

APRA is proposing that:

• all new columns under SRS 605.0 RSE Structure be determined  non-confidential. As per APRA’s July 2022 response to consultation on confidentiality, only SRS 605.0 Table 4 Fees and costs arrangements column 6 will remain confidential; and
   
• all data reported on SRF 606.1 RSE Profile fees and costs arrangements under SRS 606.0 RSE Profile be determined non-confidential.
   

Attachments 
 

Attachments of the SRS 332.0 and SRS 550.0 mock ups, and the Superannuation Data Transformation confidentiality proposal are available at: Phase 1 Breadth - Consultation on Publications and Confidentiality.

Footnotes

¹  This consultation follows the determination of the amended superannuation reporting standards in May 2023. APRA has undertaken three separate prior consultations relevant to these proposals. APRA has considered feedback provided in submissions as part of the prior consultations in formulating these proposals for publication and confidentiality of the data. Consultation on expenses reporting standards – August 2020 (Discussion Paper and Response); Consultation on publications and confidentiality– February – June 2022 (Discussion Paper and Response); and Consultation on minor amendments to SDT Phase 1 reporting standards – November 2022 – March 2023 (Discussion Paper and Response): together “The prior consultations”.

²  APRA's objectives.