The Australian Prudential Regulation Authority (APRA) has issued directions and imposed a new licence condition on Suncorp Portfolio Services Limited (SPSL) after investigating a matter referred by the financial services Royal Commission.
In handing down his final report in February last year, Commissioner Kenneth Hayne asked APRA to investigate the registrable superannuation entity (RSE) licensee’s delay in transferring members into its lower fee MySuper product until just before the legal deadline.
While APRA’s investigation did not conclude that SPSL breached the Superannuation Industry (Supervision) Act 1993, the investigation raised concerns about the adequacy of SPSL’s internal processes for demonstrating how members’ best interests were considered and prioritised.
To address APRA’s concerns, APRA has imposed a new licence condition requiring SPSL to document how it considers and prioritises members’ interests when it makes decisions that materially affect their interests. This measure will improve SPSL’s decision-making processes and also ensure that APRA is better able to assess whether members’ interests are being sufficiently considered and prioritised by SPSL in the future.
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 will 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.