- Prudential review findings
Recognising the changing environment in which the superannuation industry operates,and the need for RSE licensees to have a stronger focus on member outcomes, APRA formally commenced Prudential review in early 2018 with the expectation that it would demonstrate progress by the industry in many areas, but would also highlight areas where further enhancement in industry practices was needed.
In particular, the review sought to determine whether the largely compliance-based approach to governance and risk management taken by industry prior to the prudential framework’s introduction had given way to an approach with a stronger focus on improving processes and practices in the best interests of superannuation members. Below we detail the summary of the review findings.
For the below Prudential Standards, APRA Prudential Review noted that the Industry practices have improved and the key requirements of the standards are met. No enhancements were proposed in relation to these three standards.
- SPS 310 Audit and related matters;
- SPS 160 Defined Benefit Matters;
- SPS 410 MySuper Transition (for future standards, provide more clarity on the expectation and key milestones); and
- SPS 450 Eligible Rollover Fund (ERF) Transition.
- APRA, Post-implementation review of APRA’s superannuation prudential framework (Discussion Paper, May 2018) www.apra.gov.au/post-mplementation-reviewapras-superannuation-prudential-framework
- Commonwealth, Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, established on 14 December 2017 by Governor-General of the Commonwealth of Australia, financialservices.royalcommission.gov.au/Pages/default.aspx
- His Excellency General the Sir Peter Cosgrove AK MC (Retd); Productivity Commission, Review of the efficiency and competitiveness of the Australian superannuation system, established on 17 February 2016 www.pc.gov.au/inquiries/completed/superannuation
- APRA Prudential Inquiry into Commonwealth Bank of Australia Final Report www.apra.gov.au/sites/default/files/CBA-Prudential-Inquiry_Final-Report_30042018.pdf