Proposed authorisation requirements for MySuper products have been published by the Australian Prudential Regulation Authority (APRA), giving providers eight weeks to respond.
APRA’s deputy chair Ross Jones said the guidelines were aligned with legislation, while at the same time encouraging Registrable Superannuation Entities (RSE) to begin speaking with APRA supervisors “as soon as possible”.
While RSEs’ final applications – due on Friday 29 June – could be in electronic form only, Jones said applicants could submit drafts in writing.
The discussion paper, ‘MySuper authorisation and transition standard’, published yesterday, speaks to RSEs wanting to offer MySuper options from 1 July next year because most employers will have to make default contributions to such options from 1 October next year.
RSEs that received APRA authorisation for MySuper could offer ‘choice’ products, the paper said.
“Further, MySuper products will be able to be provided in both non-public offer RSEs and public offer RSEs.”
Employers would have to pay default contributions into only those funds offering a MySuper product from 1 October 2012 – and RSE licensees may offer MySuper options only if authorised by APRA.
While final applications could be by electronic forms only, the discussion paper said that RSEs could send drafts by email or hard copy.
APRA’s guidelines said comments on a draft would “in no way constrain APRA’s delegate in making a decision on whether or not to approve a formal application to offer a particular MySuper product”.
Similarly, the paper said APRA had “no legislative constraint on the number of times that (it) could require further information as part of its assessment process”.
“If an RSE licensee’s initial material is reasonably complete, two rounds of information provision should be sufficient,” the paper said.
Potential MySuper providers were put on notice that their history with APRA would be considered.
Apart from the direct application form, APRA’s previous experience of the RSE licensee and its directors “may be relevant to its consideration of the likely compliance with the enhanced trustee obligations in relation to MySuper products”, the paper said.
Transition to MySuper would occur from 1 January next year to 1 July 2017 “by which date all accrued default amount of members must be in a MySuper product, except in limited circumstances”, APRA’s paper said.
Business compliance costs would also be considered, APRA said.
“APRA welcomes information from interested parties,” the paper said.
The authority asked applicants to assess the impact of changes, and “any marginal compliance costs that APRA-regulated entities are likely to face”.
