The Australian Prudential Regulation Authority (APRA) has commenced consultation on an updated prudential standard requiring registrable superannuation entity (RSE) licensees to assess the outcomes they are delivering for members.
APRA released Prudential Standard SPS 515 Strategic Planning and Member Outcomes
last December as part of a package of measures designed to strengthen RSE licensees’ strategic and business planning and assessment of performance, with a focus on enhancing member outcomes. The standard introduced a number of requirements, including an outcomes assessment requiring licensees to annually evaluate their performance in delivering sound, value-for-money outcomes to all members, covering both MySuper and choice products.
Following the passage of Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No.1) Bill 2019 last month, APRA has revised SPS 515 to clarify how the legislated outcomes assessment in the Bill interacts with APRA’s requirements.
RSE licensees will be required to undertake an annual Business Performance Review requirement, which maintains the overall substance of the requirements outlined last December. In undertaking their Business Performance Review, RSE licensees must take account of the legislated outcomes assessment and meet other requirements designed to ensure APRA’s original policy objectives are met. These include:
• reviewing the performance of their business operations through robust business plan monitoring;
• analysing the outcomes delivered to different membership cohorts;
• considering whether they will continue to deliver quality member outcomes into the future; and
• taking action to address any identified areas of required improvement.
A four-week consultation period is now underway. The new standard is still scheduled to commence from 1 January next year.
Copies of the letter to RSE licensees outlining the proposed changes and the draft prudential standard are available on APRA’s website at: https://www.apra.gov.au/strengthening-superannuation-member-outcomes