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4. Contribution transitional arrangements
4.1Contribution transition-in period
(a)For the purposes of this Schedule, the contribution transition-in period means the period between 1 July 2014 and 30 June 2017.
(b)Alternate electronic file formats described in clause 4.3 must not be used by an employer, a trustee of an APRA-regulated superannuation entity or a trustee of an SMSF after 30 June 2017.
4.2Contribution induction period
For the purposes of this Schedule, the contribution induction period means
(a) For medium and large employers, the period between 1 July 2014 and 30 June 2015, and
(b) for small employers, the period between 1 July 2015 and 30 June 2016.
4.3Contribution transition-in arrangements – electronic file formats that do not conform with the Standard
During the contribution transition-in period, contribution transaction messages as defined in the document referred to in Schedule 4(a) to the Standard may be submitted by an employer to a trustee of an APRA-regulated superannuation entity or a trustee of an SMSF in an electronic file format that does not conform with the Standard provided that the following conditions are met:
(a)the employer and the trustee agree in writing that each party to the agreement will meet the requirements as set out in paragraphs (b)(i) to (b)(iv) of clause 4.3 during the contribution transition-in period or such shorter period as might be agreed to between the parties; and
(b)in relation to the contribution transaction messages the following conditions are satisfied:
(i)terms and definitions used in the alternate format align with the relevant terms and definitions specified in the document referred to in Schedule 2 to the Standard;
(ii)associated payments conform with the methods specified in the document referred to in Schedule 3 to the Standard; and
(iii)alternative data mappings (if any) are documented to show how the alternative data elements map to the data elements in the document referred to in Schedule 4(a) to the Standard;
(iv)business rules and data requirements used in the alternate format align with the business rules and data requirements specified in the document referred to in Schedule 4(a) to the Standard.
4.4 Contribution induction period –exception toconformance with the Standard
(1) An employer ora trustee of aregulated superannuation entity may nominate to participate in a contribution induction process provided by the Commissioner.
(2) Prior to nominating, an employer and a trustee mustagree to participate in a contribution induction process provided by the Commissioner.
(3) Where an entity nominates to participate in the contribution induction process, the Commissioner will advise the entity if their nomination has been accepted.
(4)If an entity’s nomination is accepted, the Commissioner will advise the entity of the contribution induction group the entity will participate in, and theinduction commencement date and induction completion date for that group. These dates establish the group induction period for an induction group.
(5)The Commissioner mayaccept a nomination in respect of a contribution induction group if the following conditionsare satisfied:
(i)The minimum specified profile to be used between the employer and the trustee of an APRA-regulated superannuation entity or SMSF during the group induction period is theultra-light profileas set out in section 3.3.1 of the Data and Payment Standards - Message Orchestration and Profiles document referred to in Schedule 5 to the Standard as it exists from time
(ii)Third-party certification of the IT solution to be applied during the group induction period has been completed before the commencement of the group induction period.
(iii)Cross-certification of the IT solution applied during the group induction period will be completed not later than four weeks after the end of the group induction period.
(6) Where an entity is advised by the Commissioner of an induction commencement date that is later than
(i) 1 July 2014, in relation to a medium or large employer, or
(ii)1 July 2015, in relation to a small employer,
the entity may enter into a contribution transition-in arrangement under clause 4.3 for the period until their induction commencement date.
(7) Where an employeris accepted and participates in the contribution induction process provided by the Commissioner, an exception to conformance with the Standard exists for the contribution induction period in relation to contribution transaction messages defined in the document referred to in Schedule 4(a) to the Standard submitted by the employer to any trustee.
4.5Requirement to receive compliant contribution transaction messages
Notwithstanding clause 4.3 or clause 4.4, on and after 1 July 2014 a trustee of an APRA-regulated superannuation entity or a trustee of an SMSF must maintain a capability to receive from employers contribution transaction messages that comply with the relevant specifications and requirements contained in the document referred to in Schedule 4(a) to the Standard.
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Explanatory statement to accompany amending LI
From 1 July 2014, all trustees of regulated superannuation entities are required to receive employer contribution messages and employee registration and update messages in a format that complies with the Superannuation Data and Payment Standards 2012 (the Standard).
Extension of contribution transition-in period
In response to industry representations made via the SuperStream Advisory Council, the Commissioner has determined that it is appropriate to extend the contribution transition-in period by 12 months to 30 June 2017. This will enable superannuation entitiesand employers to implement the Standard in a timeframe that meets their business needs and recognises the investment that has been made in relation to existing employer contribution platforms.
Contribution induction period
In order to support the orderly and graduated implementation of the Standard, the Commissioner has also determined that it is appropriate to establish induction groups of superannuation entities and employers that will generate the impetus necessary to ensure the successful implementation of the Standard in relation to employer contributions.
The process coordinated by the ATO during the induction period provides a production environment within which employers and superannuation entities can develop confidence and trust in the solution to be applied to implement the Standard for employer contributions.
The contributions induction process is separate and distinct from the contribution transition-in arrangements available to employers and trustees under section 4.3 of Schedule 1 to the Standard.
A contribution induction process will be providedby the Commissioner. Contribution induction groups will be determined by the Commissioner and will contain superannuation funds and key intermediaries such as clearing houses and employers. The Commissioner will advise entities which contribution induction group they will participate in and the induction commencement date and induction completion date for that group, which establish the group induction period.
All participants in the induction groups will play a key role in ensuring the Standard is implemented in relation to employer contributions in an orderly and sustainable manner. Employers paired with employer-nominated (default) superannuation funds in particular have a central function in that trustees of choice-nominated APRA-regulated superannuation funds and SMSFs can expect to receive employer contributions and on-forwarded data messages within the Standard where an employer-sponsor is participating in the induction process.
Employers and trustees of superannuation entities will voluntarily nominate to participate in the contribution induction process. Acceptance into induction group 1 will be subject to the Commissioner’s discretion and an undertaking that the relevant conditions outlined in section 4.4 of Schedule 1 to the Standardwill be met. Detailed inductionplans prepared by superannuation entities in consultation with key employer clients will enable the Commissioner to assess an entity’s suitability for inclusion in induction group 1. These plans would include details of gateway network membership or partnership with a gateway member.It is necessary for an entity to demonstrate that it could fully comply with the Standard from 1 July 2014.
The size and membership of induction group 1 will be structured so as to ensure a broad cross-section of key products and IT solutions are proven in the initial induction process. This will enable certified products and solutions to be applied after 1 October 2014 by entities that have not participated in induction group 1.
Induction group 1 for medium to large employers will be coordinated from 1 July 2014 to 30 September 2014. Paired induction group participants will be added progressively each fortnight during induction group 1. Induction group 2 will be coordinated from 1 October to 31 December 2014 or such shorter period as may be appropriate in the circumstances. The Commissioner will nominate additional induction groups, if required, up to 30 June 2015 for medium to large employers and may publish a schedule of induction groups once participant nominations have been received. This will enable employers and superannuation funds to identify an appropriate date from which they can participate in an induction group. The same parameters will apply during the contribution induction period for small employers.
Participants in the induction groups will be expected to share their learnings with other stakeholders in the superannuation industry, both during and at the end of the induction period.
Entry and exit criteria
Third-party certification
Third-party certification is an essential part of ensuring all entities can engage in the induction process with confidence. This certification is provided on the basis that an entity can comply with requirements specified in a test and conformance suite published by the ATO.
Cross-certification
Cross-certification of the IT solution applied during the induction period by induction group participants represents peer-endorsement within an induction group and will require repeat tests for both default fund and choice fund contributions to ensure verification. The timing and number of iterations required may be influenced by the contribution payment cycle employed by the employer. On-forwarding of choice contributions data remains industry best practice for the purposes of the Standard.
Two independently paired passes of the induction process will generally be recognised as cross-certification. The Commissioner acknowledges that the cross-certification process for participants joining an induction group towards the end of an induction group period can only be completed after the end of the induction group period.
Error message requirements
To reduce complexity in the initial phases, error messaging capability[1] will not be required in the first 6 months of the induction period unless paired entities mutually agree to adopting a profile defined in the Data Standards - Message Orchestration and Profiles document as it exists from time to time that supports error messaging capability. This will assist all entities to develop and test solutions prior to moving to full implementation.
[1] See the Error Codes Management Document referred to in Schedule 6 of the Superannuation Data and Payment Standards 2012.