In a statement, APRA said conditions issued to AMP Superannuation Limited and NM Superannuation Proprietary Limited also arises from issues identified during its ongoing prudential supervision of the licensees, along with matters that emerged during the Hayne royal commission.
“The new directions and conditions are designed to deliver enhanced member outcomes by requiring AMP Super to make significant changes to its business practices,” APRA 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 to report on remediation and compliance with the new directions and conditions.”
In a response to the ASX, AMP said it would fully implement APRA’s directions and additional conditions. AMP also said that it has been working with APRA on the 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. 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,” AMP said.
“In addition, in 2018, AMP significantly reduced fees on our flagship MySuper products, benefiting approximately 600,000 existing members as well as new members. In 2019, AMP also reduced fees to MyNorth.”
It is the second time APRA has used the broader directions power that 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 May, APRA issued directions to companies within IOOF for failing to comply with licence conditions.