APRA Consults on Prudential Standard for the Superannuation Entities
APRA is consulting on the prudential standard on Strategic Planning and Member Outcomes (SPS 515), following the passage of the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No.1 Bill 2019) on April 04, 2019. The comment period for the proposed revisions to SPS 515 ends on May 29, 2019. Also, APRA proposes to maintain the commencement date of SPS 515 as January 01, 2020.
The Bill introduces a legislated outcomes assessment. APRA is proposing revisions to SPS 515 to clarify how the legislated outcomes assessment interacts with APRA requirements and to specify additional factors to be addressed in the assessment, as provided for in the legislation. The overall substance of the requirements for registrable superannuation entity (RSE) licensees in revised SPS 515 are unchanged, though the requirements are expressed differently to more clearly delineate the APRA requirements from those imposed by the Bill.
The revised SPS 515 requires a Business Performance Review (BPR) to be undertaken as part of an RSE licensee’s strategic and business planning process. This review reflects the same underlying objective as the requirements set out in the version of SPS 515 released in December 2018. That is, it requires an RSE licensee to be both reflective and forward-looking in identifying the improvements that can be made to enhance the sound and prudent management of its business operations and to drive the sustainable delivery of better outcomes for members. RSE licensees will be required to take into account the results of the legislated outcomes assessment as part of their BPR. The BPR requires an RSE licensee to analyze its performance in achieving its strategic objectives, having regard to its monitoring of its business plan, the outcomes achieved for different cohorts of members, and the results from the legislated outcomes assessment. The first BPR is required to be undertaken by December 31, 2020.
SPS 515 is also being amended to include requirements for the legislated outcomes assessment, as provided for under the Bill. RSE licensees will be required to:
- Document the methodology applied in undertaking the legislated outcomes assessment, including how the RSE licensee has determined “comparable choice products”
- Under section 52(11) of the Superannuation Industry (Supervision) Act 1993 (SIS Act), separately consider the impact of scale and the operating costs of its business operations on the financial interests of members that hold the product
Additionally, APRA published an information paper on post-implementation review of its superannuation prudential framework. In this post-implementation review, APRA examined whether the 2013 prudential framework for superannuation met its objectives in terms of improving practices of RSE licensees from those observed before 2013, resulted in any unintended consequences, and continues to remain fit for purpose going forward.
Related Links
Comment Due Date: May 29, 2019
Effective Date: January 01, 2020 (Proposed)
Keywords: Asia Pacific, Australia, Insurance, Superannuation, SPS 515, Prudential Framework, APRA
Previous Article
PRA Issues Systemic Risk Buffer Rates for Ring-Fenced BanksRelated Articles
MAS Concludes Blockchain Payments Prototype Shows Commercial Potential
MAS and Temasek jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin, which focused on building a blockchain-based multi-currency payments network prototype.
EBA Publishes Phase 2 of Technical Package on Reporting Framework 2.10
EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.
APRA Updates Reporting Validation Rules in July 2020
APRA updated the lists of the Direct to APRA (D2A) validation rules for authorized deposit-taking institutions, insurers, and superannuation entities.
PRA to Partly Apply EBA Guidelines on Disclosures for COVID Measures
PRA updated the statement that provides guidance to regulated firms on implementation of the EBA guidelines on reporting and disclosure of exposures subject to measures applied in response to the COVID-19 crisis.
EBA Updates List of Correlated Currencies Under CRR
EBA updated the 2019 list of closely correlated currencies that was originally published in December 2013.
FASB Proposes to Delay Implementation of Insurance Contracts Standard
FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).
APRA Updates Regulatory Approach to Loan Deferrals Amid COVID Crisis
APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.
BCBS and FSB Set Out Recommendations for Benchmark Transition
BCBS and FSB published a report on supervisory issues associated with benchmark transition.
IAIS Sets Out Recommendations for Benchmark Transition for Insurers
IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.
ESMA Updates Reporting Manual on European Single Electronic Format
ESMA updated the reporting manual on the European Single Electronic Format (ESEF).
