APRA imposes licence conditions on bank-owned super fund
The Australian Prudential Regulation Authority has issued directions and additional licence conditions to one of the bank-owned super funds following concerns about compliance and member outcomes.
In a public statement, APRA stated that it has issued directions and additional licence conditions to AMP Superannuation Limited and N.M. Superannuation Proprietary Limited, collectively AMP Super, to address a range of concerns regarding AMP Super’s compliance with the Superannuation Industry (Supervision) Act 1993 (SIS Act).
APRA said the action arises from issues identified during APRA’s ongoing prudential supervision of AMP Super, along with matters that emerged during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“The new directions and conditions are designed to deliver enhanced member outcomes by requiring AMP Super to make significant changes to its business practices,” it said.
“Areas identified for improvement include conflicts of interest management, governance and risk management practices, breach remediation processes, addressing poor risk culture and strengthening accountability mechanisms. The directions also require AMP Super to renew and strengthen its board.”
Additionally, APRA requires AMP Super to engage an external expert on remediation and compliance with the new directions and conditions.
APRA said this is the second time it has used the broader directions power since it was granted in April following the passage of the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No 1) Bill 2019.
In a public statement issued by AMP, the bank said it will fully implement the directions and additional conditions and that it has been working constructively with APRA on this matter and has already taken action on a number of the issues raised.
“In May 2019, the AMP Limited Board moved to expand the superannuation trustee boards, broadening the range of skills and experience,” it said.
“This, together with a new trustee operating model, is designed to strengthen the independence of the trustees and ensure they continue to work in the best interests of members.”
In addition, AMP said last year it significantly reduced fees on its flagship MySuper products, benefitting approximately 600,000 existing members as well as new members.
“In 2019, AMP also reduced fees to MyNorth, its flagship investment platform, benefitting superannuation members and investors,” it added.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.