The Australian Prudential Regulation Authority (APRA) has agreed to accept a court enforceable undertaking (CEU) from AMP Superannuation Limited and N.M. Superannuation Proprietary Limited (collectively AMP Super) pledging to rectify governance and risk management deficiencies.
AMP Super controls two superannuation funds1 with estimated net assets of $116 billion and sits within the AMP group of companies (AMP Group).
APRA’s decision to accept the CEU follows a lengthy investigation into past conduct that APRA believes led to a number of potential breaches by AMP Super of the Superannuation Industry (Supervision) Act 1993. Some of these matters were referred to APRA by the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry in February 2019, and others were self-reported by AMP Super between late 2019 and 2020.
The Australian Securities and Investments Commission (ASIC) has been conducting its own investigations into AMP Super, and APRA and ASIC have engaged with each other on their respective investigations and have agreed that the entering into of this CEU will address regulatory concerns both agencies have had with AMP Super.
APRA had already imposed additional licence conditions and directions on AMP Super in June 2019 in response to concerns about its governance and risk management frameworks. Although AMP Super has since made improvements to its internal systems, controls and processes, the CEU covers specific matters additional to those addressed by APRA’s 2019 enforcement action.
APRA recognises AMP Super’s improvements, but believes these must be further embedded and operationalised.
AMP Super has acknowledged APRA’s concerns, and accepted that rectification and remediation of members as outlined in the CEU are appropriate.
Under the terms of the CEU, AMP Super has committed to:
- identify and address the root causes of the potential breaches and issues with input from an independent expert;
- rectify areas of concern;
- remediate members who have been affected by aspects of the conduct dealt with by the CEU (noting that AMP Super has already remediated members in some cases); and
- continue to enhance its governance controls, risk management and processes for acting in members’ best interests.
APRA Member Margaret Cole said APRA accepted the CEU as the most effective and efficient way to protect AMP Super members by ensuring there is minimal risk of such issues recurring.
"AMP is one of the wealth industry’s largest and best resourced companies, and APRA expects a commensurately high standard of governance and risk management.
"While we acknowledge the efforts AMP Super has made towards improving its internal systems, the issues addressed by the CEU show there is further work to do. By offering this CEU, AMP Super has committed to fix promptly remaining legacy issues that have existed within its superannuation business and ensure affected members are appropriately remediated," Ms Cole said.
The CEU is available below or on the APRA website at: Enforceable undertakings register.
1 The Super Directions Fund and Wealth Personal Superannuation and Pension Fund