Contributions Implementation Planning Concepts and Approach

Transcription

1 Contributions Implementation Planning Concepts and Approach Presented by: Philip Hind National Program Manager Data Standards and ecommerce Program Australian Taxation Office November 013 V1.1 1

2 Contents Contributions Strategy Transitionin Approach Induction Groups Entry and Exit criteria Certification Onboarding Key Roles

3 Contributions Strategy Overview 3

4 Why are we doing this? Cooper estimated $1 billion in savings p.a. could be realised through the SuperStream reforms a large part of this estimate was based on the contributions changes associated with data standards and ecommerce. IMPROVED EMPLOYER EXPERIENCE Simpler, consistent method of preparing contributions Single channel for dealing with funds (incl. SMSFs) Reduced payment processing costs LOWER FUND ADMIN COSTS Reduced payment processing costs More automation through greater straightthrough processing Faster processing of contributions Improved data quality issues and less rework effort BETTER RETIREMENT OUTCOMES Reduced admin costs Higher lifetime savings to members Fewer lost accounts

5 Transitionin Basics Key learnings from the rollover transitionin process have been built into the contribution process, although different dynamics are at play. A oneyear window is being created for undertaking transitionin Funds need to transitionin to the contributions standard during FY 0115 beginning on 1 July 01 and completing key milestones by 30 June 015 assisted by phasing in through induction groups and agreed schedule dates with default employers Large and Medium employers need to transitionin to the contributions standard during FY 0115* beginning on 1 July 01 and completing key milestones by 30 June 015 assisted by phasing in through induction groups and agreed schedule dates with default employers The induction process will start slowly with small volumes and limited players before progressively ramping up with more volumes and more players The readiness phases which need to precede induction emphasise key steps in capability building and onboarding The ATO will play a key orchestration and oversight role in the transitionin process, in collaboration with APRA and major business stakeholders The Legal Instrument (Schedule 1) will be updated to reflect these phasings and provide certainty around how compliance obligations need to be met. * Small employers start from 1 July 015 and would have a similar oneyear window to transitionin 5

6 Implementation Lifecycle The transitionin process is designed to support four phases of implementation 1 CAPABILITY BUILD ONBOARDING 3 INDUCTION BAU Acquire Certify Pair Connect Start Repeat 1 Repeat BAU Build or buy Internal Test Business Readiness External Test Conformance Register Certification Agree default pairing Schedule start date Exchange credentials Configure Exchange Message Trials Final Readiness Induction Entry Firsttime Through Fix & Remediate Secondtime Through Fix & Remediate Thirdtime Through Fix & Remediate Crosscertify Induction Exit Issues Managed peertopeer Regulatory compliant Continuous improvement 6

7 Transitionin Timetable The implementation plan for 0115 comprises two induction groups of 1weeks each followed by open scheduling of followon groups. All funds in receiving mode Light profile only Turn on error processing Jun 01 Sep 01 Dec 01 Mar 015 Group 1 Induction Group Induction Ongoing Early adopters group opt in Approx 0 employers and 15 funds Second wave group opt in Numbers to be oonfirmed but higher volumes Add in pass through of choice contributions from Group 1 cross certified solutions Next progression step to be confirmed 7

8 Induction Group 1 This induction group runs from 1 July to 30 September 01 All entrants would be restricted to use of the ultralight profile (i.e. no automated error or outcome messaging)* The number of employer sources and volumes would be restricted Onboarding of employers to default funds will be limited to a small, select number of employers (say 0). Only a small volume of choice contributions will be introduced during this period; with each of these will directly related to a default onboarding instance and forwarded via the gateway onforwarding process. Only a small number of clearing house and payroll solutions would be involved during this period On an optin expression of interest basis, the ATO would coordinate the participants in this group and oversight entry and exit criteria. * This restriction would be in place for the first six months to Dec 01 thereby simplifying readiness preparation and reducing implementation risk. Errors and any reverse workflow would be handled through existing communication channels. 8

9 Detailed Timetable: Group 1 Induction Induction Group 1 would slowly ramp up to 0 employers over a 1 week period, progressively introducing different source solutions. 01 1Jul 15 Jul 31 July 15 Aug 31 Aug 15 Sep 30 Sep First standard contributions Extend parties Extend parties Ramp up Ramp up Exit Group 1 No of Employers New Cum No of Funds (default) New Cum No of Funds (choice)* New Cum No of Clearing Houses New Cum No of Payroll Solutions/Hubs New Cum. 6 * This is an estimate of APRA fund choice distributions from pass through and should be taken as indicative. The exact number would only be clear when firm scheduling of candidates were known. There would also be a quantity of SMSF choice contributions as well (not estimated). 9

10 Detailed Timetable: Group Induction Induction Group would introduce new employers, new funds and new source solutions over a further 1week period Oct 15 Oct 31 Oct 15 Nov 30 Nov 15 Dec 31 Dec First standard contributions Extend parties Extend parties Ramp up Ramp up Exit Group 1 No of Employers New Cum No of Funds (default) No of Funds (choice)* No of Clearing Houses No of Payroll Hubs New Cum. New Cum. New Cum. New Cum * Plus SMSF choice (not estimated) 10

11 Ongoing process Details of the transitionin process postdecember 01 need further refinement but should include: After a solution has been crosscertified (exit criteria have been met by at least two funds), any employer can start sending contributions using the standard without further induction Employer must still have met the other entry criteria Funds and large/medium employers may otherwise set a mutually agreed startup date provided this is no later than 30 June 015. A third induction group may be required to complete crosscertification of fund and employer solutions* Alternate channels can be used throughout this period. * It is not intended to induct every employer side solution, but only those with significant market presence. There will be diminishing returns/high effort to sustain this beyond the first 69 months. 11

12 Entry and exit criteria Each induction group would have a series of entry and exit criteria with progress and status monitored via the ATOled Nerve Centre Entry criteria Each entity has completed third party certification Each default employerfund pairing has completed ecommerce onboarding readiness and trials Exit criteria Each entity has successfully completed the induction process checks Money and data has been reconciled successfully Choice and default messages have been processed successfully. On exit, ATO would also have a role in managing crosscertification and publicising inpattern solutions. At the conclusion of the induction process, the contributions process for each fund/employer would move to BAU mode with no ongoing oversight role by the ATO or Nerve Centre 1

13 Certification A certification process supported by a collaborative test facility is being established as a core part of the startup pathway. Each solution will need to have completed third party certification prior to acceptance into the induction process The ATO will publish a test and conformance suite for contributions, including a standard set of test cases, which will form the basis for third party certification The ATO will collaborate with the local arm of the Drummond Group to ensure that a test and certification facility is available for all solution providers Different certification scenarios (and therefore credentials) will be available for different solution types (eg. Employer side vs fund side solutions) It is expected this facility will be available for use by prospective testers no later than February 01 The operators of this service will be expected to maintain alignment and currency of the conformance suite and test cases with the published ATO versioning As the facility is being run by a private group, commercial charges will apply but these are expected to be minimal There are currently no other alternative suppliers in Australia who have the capability to provide this service in the available timeframe, however the ATO will maintain the right to appoint other providers in the future (if needed). Once a solution has achieved two independently paired passes of the induction process, the ATO will recognise that solution as having achieved crosscertification This should help trigger a rapid adoption phase with other entities not needing to repeat induction. 13

14 Onboarding The onboarding process is a set of critical preparatory steps to be undertaken before induction can start. The onboarding process can be undertaken as part of solution recruitment in the capability building phase or as part of the final onboarding readiness phase Solution recruitment will generally occur early in the implementation cycle and includes activities such as solution providers signing up clients to a SuperStream compliant offering in the process potentially removing some of the oneonone onboarding activities which might be required with a direct default fund relationship Onboarding would be done in whole or part by the solution provider as part of that service offering Alternatively, this process needs to be undertaken oneonone by the employer (or their agent) with a default fund partner In onboarding, a set of key tasks needed to be completed as prerequisites to implementing standardsbased messaging of contributions. These include: Agreeing an employerdefault fund pairing or solution hubfund arrangement Scheduling a transaction start date (or ramp up program of dates) Exchanging security credentials Configuring message profiles Trialling of message exchanges to ensure connectivity. 1

15 Nerve Centre Role An ATO operated nerve centre will provide coordination and oversight during the early transitionin period and have a monitoring, intelligence gathering and issue escalation role Who will be involved? The ATO will host the nerve centre (teleconference facility) and associated situation room to track implementation readiness, scheduling and issue resoluton Key stakeholders in each induction group from funds, employers and intermediaries will be invited to participate The mix of stakeholders and focus is expected to change over time What purpose will it serve? Coordinating and monitoring key induction activities, steps and phases Managing entry and exit points to induction (including cross certification) Validating and sharing lessons learned Issue escalation and problem resolution (where this is appropriate) How long will it run? It is intended to operate during the first six months as part of the induction process Some residual function may need to persist past this date How will information be shared? As much information as possible will be shared on the public record including progress with the implementation, success stories and lessons learned The ATO will use its website and arrangements with its key influencer network to publicise this work. 15

16 What funds need to do I This is the time to get your detailed project planning and resource mobilisation underway Be ready to receive contributions according to the standard (xbrl/ebms message format but with no error messaging) from 1 July 01 Work out your approach to channels for Day 1 For your standards channel (Channel A ), decide which induction group you are going to be in Work out your onboarding strategy for Channel A and how you are going to bring employers on in a progressive manner Develop a schedule for discussion with your key stakeholders, including the ATO which will assist with coordination. 16

17 What funds need to do II A fund s channel strategy is the key to working out its transitionin plan and settling conformance issues Each fund needs to support up to three channels during transitionin: A Standards channel: messaging based xbrl (mandatory) B Alternate channel: electronic web or online application* (optional) C Nonconforming channel(s): existing manual or other nonconforming channels (residual) The A Channel: Standardsbased This is a new channel and needs careful orchestration Some rules to be relaxed in the early stages, eg. Light profiles only to be active in early stages (no error messaging) Governed by a controlled induction process The B Channel: Bridging solution based on existing/upgraded electronic channel Although some changes are needed, this channel is largely BAU and is selforganising by each fund Funds have up to three years to maintain useage of this channel provided an employer consents to these conditions (flexibility around this timeframe is likely to be exercised where more time is needed) It is up to each fund to determine the timing and nature of its migration plan for moving employers from alternate channels to full standards compliance The C Channel: APRA funds must be able to process nonconforming contributions during the transitionin period (and beyond) This channel(s) is expected to diminish over time until volumes are negligible. * This solution must be compliant with transitional requirements of the standard, as set out in the alternate channel checklist (refer Attachment A) 17

18 What employers need to do This is the time to get your detailed project planning and resource mobilisation underway Talk to your default fund and/or your service partner about their plans Work out the solution and timing that best fits your business needs If you want to go down the standards path from 1 July 01 (Channel A): nominate for an early induction group if you would like to be in one these groups, or agree a later implementation date with your default fund (inside FY 0115) If you want to keep working with an existing electronic solution (Channel B), then agree that arrangement with your default fund there may be some changes you still need to make in the shortterm your default fund may choose to migrate you to a standards based channel at a later date. 18

19 Attachment: Contributions Implementation Working Group Purpose: To engage industry expertise to support the development of strategies and products to support the implementation of the standard for contributions. Focus: A core focus will be on industry readiness, communication, planning, implementation and education requirements. Membership: All attendees at this forum are invited to participate as a member of the working group. Other interested people can nominate if they are willing to commit their time. Proposed meeting dates 013 Tuesday 6 November: Melbourne pm to pm Tuesday 10 December: Sydney pm to pm Fortnightly meetings will reconvene in late January 01, alternating between Sydney and Melbourne. 19

20 Contacts Find out more: ATO Data Standards and ECommerce Technical Documentation: Contact details: Chris Denney Contributions Lead Data & ECommerce Standards Australian Taxation Office Ty Winmill Senior Technical Adviser Standards Data & ECommerce Standards Australian Taxation Office Philip Hind National Program Manager Data & ECommerce Standards Australian Taxation Office COMMONWEALTH OF AUSTRALIA 010 This presentation was current in November 013 0