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APRA finalises revised measures to strengthen outcomes for superannuation members

The Australian Prudential Regulation Authority (APRA) has finalised changes to its requirements for how superannuation licensees assess the outcomes they are delivering to their members.

APRA launched a consultation in April to clarify how Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515) would interact with the Government’s new legislated outcomes assessment.

In a response letter released today, Deputy Chair Helen Rowell confirmed SPS 515 would require all registrable superannuation entity (RSE) licensees to perform an annual Business Performance Review to assess whether they are delivering sound, value-for-money outcomes for members.

Mrs Rowell said APRA designed the Business Performance Review to complement the requirements of the legislated outcomes assessment introduced by Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No.1) Act 2019.

“Where the legislated outcomes assessment requires RSE licensees to assess member outcomes at a product level at a point in time, APRA’s Business Performance Review also requires them to assess outcomes across a broader range of metrics for different member cohorts.

“Further, licensees must consider whether they will continue to deliver quality outcomes for all their members into the future, and take action if they identify areas needing improvement.

“Working together, SPS 515 and the legislated outcomes assessment will strengthen APRA’s ongoing efforts to lift industry practices and drive improvements in the outcomes all RSE licensees deliver for their members,” Mrs Rowell said.

SPS 515 will come into force from 1 January next year. 

In order to assist RSE licensees implement the new requirements, APRA today released a finalised prudential practice guide SPG 515 Strategic and Business Planning, and a draft SPG 516 Business Performance Review for a six week consultation period. APRA expects to release the final version of SPG 516 in December.

With APRA also strongly focused on weeding out underperforming funds, Mrs Rowell confirmed APRA intended to start publishing additional information on superannuation performance by the end of the year.

Starting with MySuper products, APRA plans to publish assessments of performance based on a range of measures and benchmarks in four key areas: investment returns, fees and charges, sustainability and (in due course) insurance. APRA is developing a heat map or traffic light approach that will assist stakeholders to form an overall view of the performance of each MySuper product against the measures and benchmarks used. This approach will be expanded to include choice products over time, as additional, more reliable data becomes available. 

Mrs Rowell said: “This initiative will provide clear, simple insights into how various funds and products are performing, and help stakeholders better understand the performance of the superannuation industry in delivering on its retirement income objectives.

“It also adds to the pressure APRA is applying on the trustees of underperforming funds to promptly address weaknesses or consider whether restructuring or exiting the industry is in their members’ best interests. Where trustees fail to respond appropriately, APRA will not hesitate to use its new directions power to protect the interests of superannuation members.”

Copies of the new SPS 515 and SPG 515, Response Letter and draft SPG 516 are available at  Consultations on strengthening superannuation member outcomes.