APRA Finalizes Measures to Strengthen Superannuation Member Outcomes
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. Following extensive consultation, APRA has finalized the December 2017 proposals on strengthening superannuation member outcomes. The final package includes response to submissions on the December 2017 consultation, new Prudential Standard SPS 515 Strategic Planning and Member Outcomes, amendments to Prudential Standard SPS 220 Risk Management, new Prudential Practice Guide SPG 515 Strategic and Business Planning, new Prudential Practice Guide SPG 516 Outcomes Assessment, and implementation timeline for RSE licensees. The commencement date of the amended SPS 220 and the new SPS 515 is January 01, 2020.
APRA received submissions from a wide range of industry stakeholders on the December 2017 consultation package, including RSE licensees, service providers, and industry bodies. Fifteen out of the 17 submissions received are publicly available on the APRA website. Generally, industry stakeholders were supportive of the intent of the proposed changes. However, concerns were raised about the level of prescription proposed in some areas and some aspects of implementation. APRA has summarized the key issues raised in submissions and APRA’s response in each chapter of the response paper, including the amendments to its consultation package. The package represents a continuation of a shift in regulatory philosophy for the superannuation industry, from being substantially compliance-focused to the principles-based, outcomes-oriented approach enabled by the new and enhanced prudential requirements. New requirements of APRA are designed to ensure that RSE licensees are equipped to respond to strategic challenges and to soundly and prudently manage their business operations while improving their superannuation products and options, performance, and outcomes for all members.
The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No.1) Bill 2017 (the Bill) that is before the 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 toward 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. Additionally, in relation to the reporting proposals canvassed in the December 2017 discussion paper, APRA will be conducting further work to assess the scope and timeframe for amendments to the reporting collection. This work will consider the outcomes of APRA’s post-implementation review of the prudential framework, the Productivity Commission’s final report on its review of superannuation (due December 2018), and the Royal Commission’s final report (due February 2019).
Related Links
- Press Release
- Response Paper (PDF)
- Prudential Standards and Guides
- Implementation Timeline for RSE Licensees (PDF)
Effective Date: January 01, 2020 (SPS 220 and SPS 515)
Keywords: Asia Pacific, Australia, Insurance, Superannuation, RSE Licensee, SPS 515, SPS 220, SPG 515, SPG 516, APRA
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