APRA Revamps Superannuation Regulations to Prioritize Member Interests

Finance

Article: The Australian Prudential Regulation Authority (APRA) has introduced significant updates to the Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515). The revisions aim to reinforce trustees’ responsibility to prioritize the best financial interests of superannuation fund members. APRA has set clear expectations for trustees regarding expenditure, financial resource management, and the implementation of the retirement income covenant.

APRA Deputy Chair Margaret Cole emphasized the need for trustees to prioritize member interests in all strategic and business planning decisions. Cole highlighted expenditure as a significant focus area for APRA and the wider community. Consequently, APRA will now collect, analyze, and publish detailed expenditure data at the fund level. Trustees with outlying discretionary expenditure will face scrutiny to ensure their spending aligns with members’ best financial interests.

The Financial Accountability Regime, set to take effect for superannuation next March, will further scrutinize trustee expenditure. Trustees will be required to identify an accountable person responsible for expenditure.

Another key change to SPS 515 is the requirement to support the implementation of the retirement income covenant. With over three million superannuation members expected to reach preservation age in the next decade, APRA recognizes the necessity for funds to develop robust strategies for members entering or approaching retirement.

The revised Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515) will take effect from 1 July 2025. For detailed information and links to the updated standard and guidance, visit the APRA website at Strategic planning and member outcomes: proposed enhancements.

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