APRA sticks to rigid member outcomes deadline

The prudential regulator has set high expectations for trustees to meet the inaugural annual outcomes assessment, which is less than six months away.

While consultation for prudential standard Strategic Planning and Member Outcomes (SPS 515) is underway, APRA has forewarned super funds that the proposed elements will likely remain largely unchanged and the 1 January 2020 effective date is on track.

From next January, trustees must regularly assess the outcomes provided to members and identify opportunities for areas of improvement that's supported by strategic and business planning.

By December 2019 end, APRA expects all trustees to update or be in the process of updating their strategic objectives, business plans and expense management.

For the proposed business performance review (BPR) requirements, it will seek RSE's proposed design and implementation timing. Information on cohort construction, benchmarking, data sources and alignment with the business planning process will be of particular interest.

Trustees must also prepare outcomes assessments for every MySuper and choice products, including the timing and publication of the assessments and data sources.

RSEs have the discretion to apply the 12-month outcomes assessment period either to the calendar or financial year, income year for the RSE licensee or any other 12 month period.

The FY20 financial year is likely to be the appropriate first period for the majority of RSEs as this aligns with their income year, APRA suggested.

Trustees can expect the final SPS 515 and supporting prudential guidance by the end of September.

Elsewhere, APRA has updated the form and instruction guide for applicants for MySuper product authorisation.

The new form includes new covenants that require RSEs to undertake annual outcomes assessments particularly MySuper products.

Trustees must also pass a test complying with its obligations, the fees rules and the general fees rules in relation to MySuper products.

A new section has been introduced, which seeks information from previous applicants, or applicants seeking authority to offer an existing product, on their breach history and/or the existence of any adverse findings against them.

The MySuper authorisation update is part of the newly passed Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019.

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