The Australian Prudential Regulation Authority (APRA) has released a letter outlining proposed changes to the superannuation prudential framework regarding operational governance practices of APRA-regulated superannuation trustees.
The proposed changes to the prudential framework include:
- requiring RSE licensees to have an operational governance framework, which covers the policies and processes that support strategic and business planning, and ensure rigour in operational decisions, particularly those related to expenditure and reserving;
- expanding the existing business planning requirements to ensure RSE licensees appropriately implement, monitor and review their business plans in the context of clear strategic objectives;
- requiring RSE licensees to meet minimum expectations when making decisions on fund expenditure, with a view to ensuring there is adequate rigour in decision-making, monitoring and transparency related to the use of members’ money; and
- requiring RSE licensees to undertake an outcomes assessment for all members. APRA expects to provide guidance to support this assessment, including the proposed MySuper outcomes assessment.
The changes reflect proposed increases to APRA’s powers under the Treasury Legislation Amendment (Improving Accountability and Member Outcomes in Superannuation) Bill 2017.