• On 26 October 2016, the Superannuation Complaints Tribunal released its 2015-16 Annual Report to Parliament. The report states that over the 2015-16 year, the Tribunal has made several "process improvements" to increase efficiency, including "digital telephony, establishment of an enquiries process and development of consumer fact sheets". The report also shows that the Tribunal received "2,368 complaints during the year" with "833 or 35.2% outside the Tribunal’s jurisdiction."
  • On 27 October 2016, APRA released its Annual Report for 2015-16, in which it noted that "the Australian financial system remained in a sound financial position throughout 2015/16". The report notes that there are still some areas of vulnerability, including "the need to strengthen governance and transparency in the superannuation industry" particularly in relation to the "practices of Registrable Superannuation Entity licensee boards, their composition and the effectiveness of their operations". 
  • On 28 October 2016, the Financial Services Legislation Amendment (Wholesale Margining) Regulation (Cth) 2016 was registered on the Federal Register of Legislation. According to the Explanatory Statement, among other things, "the Regulation updates the list of approved bodies…to whom trustees of superannuation funds and life companies may grant security".
  • On 28 October 2016, the Federal Court of Australia handed down its judgment in Mercer Superannuation (Australia) Limited v Billinghurst [2016] FCA 1274. The case was an appeal from the Superannuation Complaints Tribunal and concerned a complaint made by the respondent regarding the basis used to calculate the lump sum equivalent of his pension. The appeal was dismissed. 
  • On 31 October 2016, AUSTRAC released 'Australia's Superannuation Section: Money Laundering and Terrorism Financing Risk Assessment'. This is AUSTRAC's first money laundering and terrorism financing (ML/TF) risk assessment relating to funds regulated by APRA. AUSTRAC assesses the overall ML/TF risk for the superannuation sector as "medium" on the basis of the current environment. AUSTRAC notes that in the two year sample, 19 suspicious matter reports were made by superannuation fund trustees which "related to potential terrorism financing". In AUSTRAC's view, there is "a small but emerging and serious threat for the superannuation sector".

    AUSTRAC also based its risk assessment on the range of vulnerabilities specific to the superannuation industry, which it says renders the industry "an attractive target". AUSTRAC notes that "[w]ith some $1.26 trillion in assets, the superannuation sector contains numerous features that make it vulnerable to criminal exploitation," including the industry's large customer base and extensive scale and volume in outgoing transactions from the superannuation sector, which present "significant vulnerabilities, particularly in relation to fraud". Moving forward, AUSTRAC states that it will "monitor [suspicious matter reporting] trends…to determine if reporting levels have increased across the sector, and this information will inform future intelligence-led compliance activities".
  • On 31 October 2016, APRA released a letter to RSE licensees urging licensees to "identify, assess and manage the associated risks of new business processes" including conducting "a prudent assessment of the materiality of arrangements with outsourced service providers, with a particular focus on ensuring the security of member data".

    In particular, the letter reminds RSE licensees to be aware of the inherent risks associated with "sending bulk unsolicited communications requesting members to enter personal data" which APRA says may "undermine the efforts made by financial institutions and the Australian Government to educate the public on safe online behaviour". The letter also reminds licensees of the risks inherent in "providing bulk extracts of sensitive member data to third party service providers" and notes that RSE licensees are "expected to maintain the usual rigour associated with outsourcing and risk management frameworks" within this practice.