APRA Revises Measures to Strengthen Superannuation Member Outcomes
APRA published the prudential standard SPS 515, thus finalizing changes to the requirements for how superannuation licensees assess the outcomes they are delivering to their members. SPS 515 will come into force from January 01, 2020. To assist registrable superannuation entity (RSE) licensees in implementing the new requirements, APRA released a finalized prudential practice guide SPG 515 on Strategic and Business Planning, along with a draft prudential guide SPG 516 on Business Performance Review for a six-week consultation period that ends on October 10, 2019. APRA expects to release the final version of SPG 516 in December.
SPS 515 sets out the requirements for an RSE licensee to set strategic objectives for its business operations and to maintain a written business plan that articulates the approach of an RSE licensee to achieving these strategic objectives. SPS 515 contains prudential requirements to ensure that fund expenditure is in the best interests of members and that there is a comprehensive decision-making and monitoring process for expenditure that is determined by its size or nature to be significant. SPS 515 also requires an RSE licensee to undertake a business performance review to annually assess its performance in achieving its strategic objectives. The guidance in SPG 515 relates to the business planning and expenditure management requirements in SPS 515. SPG is also to be read in conjunction with SPG 516 on Business Performance Review, which provides guidance on the APRA expectations with respect to the business performance review and the annual outcomes assessment required under the Superannuation Industry (Supervision) Act 1993 (SIS Act). The Business Performance Review requires an RSE licensee to analyze its performance in achieving its strategic objectives, including the following:
- Results of its monitoring of performance against the business plan
- Outcomes achieved for different cohorts of members against objective internal and external benchmarks
- Results and underlying analysis from the annual outcomes assessment
As part of the consultation on SPG 516, APRA has substantially revised the guidance in draft SPG 516 to reflect the legislated outcomes assessment, the Business Process Review, and the movement of some guidance material into SPG 515. APRA is, therefore, releasing SPG 516 as a draft for consultation and welcomes feedback on it, particularly the guidance on the legislated outcomes assessment. The release of draft SPG 516 is intended to provide industry with more certainty on the APRA expectations for the Business Performance Review and components of the legislated outcomes assessment that are not currently envisaged to be dependent on the SIS Regulations. This draft guidance will allow RSE licensees to prepare for implementation of the prudential requirements from January 01, 2020.
Related Links
- Media Release
- SPS 515 (PDF)
- SPG 515 (PDF)
- APRA Response to Submissions on SPS 515 (PDF)
- Proposed SPG 516 (PDF)
- Related Consultations
Comment Due Date: October 10, 2019 (SPG 516)
Effective Date: January 01, 2020 (SPS 515)
Keywords: Asia Pacific, Australia, Insurance, Pensions, Superannuation, SPS 515, Business Performance Review, SPG 516, SPG 515, Outcomes Assessment, APRA
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