APRA has issued directions and imposed a new license condition on Suncorp Portfolio Services after investigating a matter referred by the royal commission.
In his final report, commissioner Kenneth Hayne had asked the prudential regulator 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 Suncorp Portfolio Services breached the Superannuation Industry (Supervision) Act 1993, the investigation raised concerns about the adequacy of the group’s internal processes for demonstrating how members’ best interests were considered and prioritised.
As a result, APRA has imposed a license condition requiring Suncorp Portfolio Services to document how it considers and prioritises members’ interests when it makes decisions that materially affect their interests.
The regulator reported the measure will improve its decision-making processes and ensure the regulator is better able to assess whether members’ interests are being sufficiently considered and prioritised.
APRA has also issued directions requiring the group 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 had also referred the Suncorp subsidiary’s payment of tax surpluses to Suncorp Life to APRA to consider.
The prudential watchdog indicated it will be considering the tax surplus payments further as part of a broader thematic review into trustee reserving practices in the super industry, before deciding what further action may be necessary.
The matter was one of 12 referred to APRA for further investigation from the royal commission.
The regulator has previously signalled its responses for other referrals concerning Avanteos Investments and Colonial First State Investments.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].