APRA Welcomes Treasury Laws Amendment Bill 2019 on Superannuation
APRA has welcomed the passage of legislation granting it stronger powers to take action against the trustees of underperforming superannuation funds. The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No 1) Bill 2019 provides APRA with a broad and long sought-after directions power. It also gives APRA the power to take civil penalty action against trustees and their directors for breaching their obligations to members, including the duty to act in the best interests of members.
The new powers for APRA include those recommended by Commissioner Kenneth Hayne in the final report of the Royal Commission into misconduct in the banking, superannuation, and financial services industry. Deputy Chair Helen Rowell said the legislation significantly strengthened APRA’s ability to drive trustees toward improved outcomes for members and to address underperformance at an early stage. “In some instances, acting in the best interests of members will require underperforming funds to merge or exit the industry. If trustees and trustee directors are not willing or able to meet their best interests duties to members, they should be prepared to face serious consequences.”
The legislation also requires trustees to conduct an annual outcomes assessment against a series of prescribed benchmarks, including all of their MySuper and choice superannuation product options, and enhances APRA’s power to refuse, or to cancel, a MySuper authorization. The new outcomes assessment requirement is generally consistent with APRA's recently released member outcomes prudential standard and APRA is considering the extent to which the standard will need to be amended to accommodate the new legislation. APRA will provide guidance to industry on this as soon as possible.
APRA has also been granted new powers to refuse authority for a change in ownership or control of an Registrable Superannuation Entity (RSE) licensee; to give a direction to a person to relinquish control of an RSE licensee; and to remove or suspend an RSE licensee where it is subject to the control of its owner. The Bill also empowers APRA to collect data on expenses related to the management and operation of a fund on a look-through basis. This will enable APRA to better understand whether trustees are spending members’ money in line with their obligations under the Superannuation Industry (Supervision) Act 1993, particularly the best interests duty and sole purpose test.
.
Related Links
- Press Release
- Treasury Laws Amendment Act 2019
- Treasury Laws Amendment (2019 Measures No. 1) Bill 2019
Keywords: Asia Pacific, Australia, Insurance, Superannuation, Prudential Framework, Treasury Laws Amendment Bill, APRA
Related Articles
ECB Amends Guideline on Temporary Collateral Easing Measures
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA Releases Report on Artificial Intelligence Governance Principles
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
HKMA to Increase Focus on Suptech and Regtech Cloud Adoption
HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.
EC Consults on Improving Transparency in Secondary Markets for NPLs
EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).
BIS and Nordic Central Banks Launch Innovation Hub in Stockholm
BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.
FDIC Tech Sprint Aims to Explore Technologies to Reach Unbanked
FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.
EC Releases Sustainable Finance Taxonomy Compass
EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.
FDIC Proposes Amendments to Real Estate Lending Standards
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
EIOPA to Consider Liquidity Risk in Stress Test for 2021
EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.
ESRB Paper Discusses Measurement of Impact of Bank Failure via Lending
The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.
