Superannuation funds need to improve their data management and demonstrate that they have robust processes in place, the Australian Prudential Regulation Authority (APRA) has warned.
"To successfully meet their obligations to members, it is essential that trustees have a data management framework that ensures complete, accurate and timely member data," APRA general manager supervisory support division Greg Brunner wrote last Friday in a letter to trustees.
"While there has been some improvement, it is APRA's view that funds still have a good way to go before the industry can be considered as handling this issue well."
The implementation of the Superstream reforms will address the issue to a certain extent, but trustees need to more to ensure their members are served properly, the prudential regulator said.
"APRA acknowledges that a major factor contributing to data issues has been a lack of common prescribed data standards within the industry, which the SuperStream reforms will now address," Brunner said.
"Notwithstanding this, trustees have a role to play in ensuring that all existing and new member data is to the necessary standard to enable them to fulfil their obligations to members."
APRA expects trustees to be pro-actively preparing for the introduction of the Superstream reforms.
This does not only involve reviewing their systems and processes for the introduction of new SuperStream data and e-commerce standard, but also ensuring that they have a robust process in place to regularly review and report on the quality of member data for completeness and accuracy.
"In particular, trustees should be focussing on a number of data items such as members' full name, date of birth, address, mobile phone number, tax file number, date joined fund, beneficiary and gender, which are critical to the accurate and timely calculation of members benefits," Brunner said.
The Association of Superannuation Funds of Australia (ASFA) said it had addressed the issue by promoting best practice.
ASFA and data specialists ITM have been benchmarking the quality of data held in the superannuation industry for nearly two years.
"The primary source of data is from employers and as the new data standards and protocols are implemented we expect data quality will improve," ASFA chief executive Pauline Vamos said.
"However, APRA has made clear today that trustees will need to be able to demonstrate they have a robust process in place to ensure they capture and verify member data with high accuracy rates."
The super funds that participate in the benchmark survey can use this information to demonstrate they have robust processes in place, Vamos said.
In the most recent ASFA-ITM Data Benchmark survey 2.8 million active members were analysed across 29 funds.
Data accuracy was found to be 76.9 per cent, while the remaining 23.1 per cent of members had at least one data error.
Australian Institute of Superannuation Trustees chief executive Fiona Reynolds welcomed APRA's comments.
"Good data is the bedrock of an efficient super system," Reynolds said.
"APRA is confirming that there will be no excuses for funds not to have their data in order as the industry prepares for the new SuperStream regime."
