APRA released its Discussion Paper Reporting standards for select investment options and draft amendments to Reporting Standards SRS 533.1 Asset Allocation and Members’ Benefits Flows (SRS 533.1) and SRS 702.1 Investment Performance (SRS 702.1) in response to the Superannuation Industry’s requirement for further clarification of its Reporting Standards.

Three Reporting Standards currently apply to select investment options and were originally intended to commence with effect from 1 July 2014 but were deferred until 2015:

  • Reporting Standard SRS 330.1 Statement of Financial Performance (SRS 330.1);
  • Reporting Standard SRS 533.0 Asset Allocation (SRS 533.0); and
  • Reporting Standard SRS 601.0 Profile and Structure (RSE) (SRS 601.0).

APRA’s key proposed changes are:

  • amending the Reporting Standards’ definition of “select investment option” which is currently defined to mean an investment option in a fund (accumulation or defined benefit), ERF or PST which:
    • underlies certain defined benefits;
    • underlies a pre-MySuper default product that includes at least one accrued default amount; or
    • underlies a reserve; or
    • at the most recent 30 June, has assets relating to non-MySuper interests:
      • greater than $50 million; or
      • less than $50 million but which represent more than 5% of total fund assets within which the investment option is located.

APRA proposes to remove the reference to investment options underlying a reserve and proposes to further consider other aspects of the definition and associated thresholds once the outcomes of the Government’s consultation in relation to choice product dashboard requirements are finalised;

  • removing the requirement to report select investment options under SRS 330.1;
  • amending two forms for select investment option reporting by amending:
    • SRS 533.1 in order to introduce reporting on:
      • movements in directly held and indirectly held investments, as follows:
        • total net transactions;
        • total investment income;
        • total realised/unrealised gains/losses; and
        • total foreign exchange gains/losses; and
      • members’ benefits flows; and
    • SRS 702.1 which will require the reporting of:
      • highest and lowest applicable fee and cost scales; and
      • examples of member fees and costs payable;
  • moving and/or amending some items currently required on SRS 330.1 and SRS 533.0 to SRS 533.1 by:
    • retaining the requirement to report the strategic asset allocation of each select investment option, as currently required under SRS 533.0;
    • reducing the reporting requirements in respect of the actual asset allocation of each investment option by removing the requirement to report fixed income currency types;
    • requiring SRS 533.0, to report investment movements in directly held and indirectly held investments, broken down by asset class, domicile and listing type on a look-through basis, where appropriate;
    • requiring SRS 330.1 to report detailed breakdowns of:
      • members’ benefits flows, sub-divided to identify the components of inflows and outflows;
      • investment income and gains/losses;
      • investment expenses;
      • operating income and expenses;
      • advice expenses;
      • insurance flows;
      • income tax expenses/benefits; and
      • transfers into and out of reserves,

on a quarterly (as opposed to annual) basis; and

  • requiring aggregated members’ benefit flows information under SRS 533.1 in respect of each select investment option.

Proposed changes

APRA is seeking comments by 15 September 2014 and it expects to release final Reporting Standards in February 2015 with a commencement date of 1 July 2015.