Registrable superannuation entity (RSE) licensees have been reminded of two new key obligations to members – the Business Performance Review (BRP) and outcomes assessment – in a letter from the Australian Prudential Regulation Authority (APRA).
Helen Rowell, APRA deputy chair, said over the past 12 months, APRA had consistently encouraged RSE licensees to engage early with APRA on the design of their BPR and the outcomes assessment, due the level of complexity involved in complying with the requirements.
“Despite this, APRA has seen a low take-up of this offer and is concerned that the lack of trial outcomes assessments being shared with APRA may be indicative of a lack of preparedness by the industry,” Rowell said.
The BPR was to be completed by 31 December, 2020, and required each RSE licensee to assess its performance in achieving its strategic objectives across its business operations.
This would consider the results of the legislated outcomes assessment and the BPR would be used as the basis for taking action to improve performance.
The first annual outcomes assessment was required to be completed by the end of February 2021, with the results published within 28 days.
The assessment required RSE licensees to conclude whether members’ financial interests are being promoted in the product they hold.
Under legislation, RSE licensees were required to consider how its MySuper products compared to other MySuper products, as well as its choice products to other choice products.
Rowell said APRA acknowledged the significant efforts of the superannuation industry to protect members’ interests during what has been a volatile and uncertain period.
“In this challenging environment, risks will continue to evolve, potentially rapidly, and all industry stakeholders will have to continue to respond and adapt accordingly,” Rowell said.
“APRA will be engaging closely with RSE licensees as they navigate the period that lies ahead, with a continuing focus on strengthening outcomes for superannuation members.”