The Australian Prudential Regulation Authority (APRA) has imposed a best interests licence condition on Suncorp Portfolio Services Limited (SPSL) after an investigation was referred by the Hayne Royal Commission.
The investigation looked into the registrable superannuation entity (RSE) licensee’s delay in transferring members into its lower fee MySuper product until just before the legal deadline.
This comes at the same time the regulator imposed the same licence condition on Colonial First State Investment Limited.
APRA found that SPSL did not breach the Superannuation Industry (Supervision) Act 1993 but raised concerns about the adequacy of SPSL’s internal processes for demonstrating how members’ best interests were considered and prioritised.
The new licence condition requires SPSL to document how it considers and prioritises members’ interests when it makes decisions that materially affect their interests.
APRA has also issued directions to SPSL requiring it to:
- Obtain independent expert verification of the analysis and methodology that will be used to determine the remediation of members affected by the delay in transferring to MySuper products;
- Notify affected members of the remediation plan; and
- Make a public statement in respect of the plan.
Commissioner Hayne also referred SPSL’s payment of tax surpluses to Suncorp Life to APRA to consider. APRA said it would be considering this issue further as part of a broader thematic review into trustee reserving practices in the superannuation industry, before deciding what further action may be necessary.