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Issue 707, 6 May 2019 
In this issue: 


Member outcomes: APRA consultation on revised prudential standard 

APRA has launched a consultation on proposed updates to its prudential standard on strategic planning and member outcomes, which will come into effect on 1 January 2020. 

APRA released Prudential Standard SPS 515 Strategic Planning and Member Outcomes in December as part of a package of measures designed to strengthen strategic and business planning and assessment of performance by registrable superannuation entity (RSE) licensees. The standard had a particular focus on enhancing member outcomes. 

The standard released in December introduced a number of requirements, including an outcomes assessment requiring licensees to annually evaluate their performance in delivering sound, value-for-money outcomes to all members, covering both MySuper and choice products (see ASFA Action issue 694). 

APRA commenced its development of SPS 515 independent of proposed legislative measures to require RSE licensees to conduct outcomes assessments, but had indicated it would review its prudential requirements in the event the legislated outcomes assessment was ultimately passed by Parliament. The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No.1) Act 2019, which was passed by Parliament in April, requires RSE licensees to undertake annual outcomes assessments for each MySuper and choice product they offer (see ASFA Action issues 704 and 698). 

APRA has now revised SPS 515 to clarify how the legislated outcomes assessment in the Bill interacts with APRA’s prudential requirements. A consultation package has been released which includes a letter to RSE licensees and an updated version of SPS 515. 

Under the revised standard, RSE licensees will be required to undertake an annual Business Performance review, which maintains the overall substance of the requirements outlined last December. In undertaking their Business Performance Review, RSE licensees must take account of the legislated outcomes assessment and meet other requirements designed to ensure APRA’s original policy objectives are met. These include: 

It should be noted that APRA intends to retain the 1 January 2020 commencement date for SPS 515. 

If you have any feedback on the revised version of SPS 515 that you would like ASFA to consider, please forward it to Byron Addison by close of business Tuesday, 21 May. 



Review of superannuation prudential framework: APRA findings 

APRA has released the findings from its recent review of the superannuation prudential framework introduced from 2013 as part of the Stronger Super reforms. 

The review found that the framework—which includes the superannuation prudential and reporting standards—has met its original objectives but must keep evolving to ensure members’ interests are protected. 

In particular, the review found that while the prudential framework had materially lifted industry practices in key areas as governance, risk management and outsourcing, there is a need for APRA to continue strengthening prudential requirements in several areas, including: 

APRA Deputy Chair Helen Rowell said APRA is already taking steps to strengthen the prudential framework in many of the areas highlighted by the review, and will look to make further changes to incorporate the review’s findings as it progresses its superannuation policy priorities. Ms Rowell said this will include consideration of measures to address relevant recommendations in the financial services Royal Commission report and the report on the Productivity Commission’s superannuation review. 

See ASFA Action issues 672, 679 and 681 for more information about the review. 




ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations

and other regulatory announcements relevant to superannuation.

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