On 12 December 2018, the Australian Prudential Regulation Authority (APRA) released a package of new and enhanced prudential requirements designed to strengthen the focus of registrable superannuation entity (RSE) licensees on the delivery of quality outcomes for their members.
- A central component of APRA’s new framework is the introduction of an outcomes assessment that will require RSE licensees to annually benchmark and evaluate their performance in delivering sound, value-for-money outcomes to all members – covering both MySuper and choice products.
- In addition to the outcomes assessment, APRA’s final package requires RSE licensees to meet strengthened requirements for strategic and business planning, including management and oversight of fund expenditure and reserves. These requirements are set out in new Prudential Standard SPS 515 Strategic Planning and Member Outcomes.
The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No.1) Bill 2017 (the Bill) that is before Parliament would, if passed, introduce a legislated outcomes assessment. APRA’s proposals are consistent with the outcomes assessment proposals in the Bill, and are being introduced now to maintain industry momentum towards delivering improved outcomes for members. APRA will review whether amendments are needed to the prudential framework requirements if the Bill is passed by Parliament in future.
- APRA emphasised its strong support for the other reforms contained in the Bill and, in particular, the enhanced directions powers for APRA, the strengthened MySuper authorisation and cancellation provisions, and the requirement for APRA to approve changes of ownership of RSE licensees.
APRA’s finalised package of measures is the culmination of extensive industry engagement that commenced in August 2017, and includes amendments to the original proposals taking into account the feedback received during consultation.
Copies of APRA’s standards, prudential guidance and response paper are available on APRA’s website at: https://www.apra.gov.au/strengthening-superannuation-member-outcomes