The Australian Prudential Regulation Authority (APRA) has amended Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515) and Prudential Practice Guide (SPG 515) Strategic Planning and Member Outcomes to reinforce trustees’ duty to act in the best financial interests of members.

Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515) will take effect from 1 July 2025.

APRA says the changes are intended to:

• ensure expenditure requirements are clearly aligned with the best financial interests duty;
• support the implementation of the retirement income covenant;
• reflect supervisory observations on areas where the industry needs to lift their approach, with a particular focus on management of financial resources; and
• improve the management of risks to members being transferred across funds.

APRA expects RSE licensees to have an effective and graduated decision-making framework that has appropriate processes for addressing the various types of expenditure, including effective controls and governance delegations. These controls and delegations would be reflective of both the size and/or nature of the expenditure, with well-defined approval thresholds and criteria, and clear requirements for reporting to the Board.

Changes in the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 include a new replacement section 99FA of the Superannuation Industry (Supervision) Act, to provide greater clarity about when and on what basis a trustee can charge a fee for financial product advice from a member’s superannuation interest.

APRA notes that:

• ASIC will, from a legal perspective, have primary regulatory responsibility as regards section 99FA, with APRA and ASIC continuing to collaborate as peer regulators; and
• ASIC has publicly confirmed that neither the current law nor proposed reforms require trustees to check all advice documents.

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