NEED TO KNOW

On 9 May 2013, APRA released for consultation a second set of draft prudential practice guides (PPGs) for superannuation.

BACKGROUND

As part of the Stronger Super reforms, APRA’s powers in relation to the prudential supervision of superannuation funds were extended to setting prudential standards which have the force of law.

In November 2012, APRA issued twelve finalised prudential standards for superannuation which will commence on 1 July 2013. They relate to prudential matters that a registrable superannuation entity (RSE) licensee must comply with, as set out in the table below:

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PPGs are intended to provide practical guidance and APRA’s views on meeting the requirements of the prudential standards. PPGs are designed to be guidance materials and do not have the force of law.

On 11 December 2012, APRA released ten draft PPGs for consultation on the following matters:

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Consultations for those draft PPGs closed on 5 March 2013 and final versions are expected to be released in July 2013.

APRA has now released a further eight draft PPGs for consultation (three of which are updates to existing superannuation PPGs).

SUMMARY

Proposed new superannuation PPGs

A summary of the areas covered by the five new PPGs is set out below:

Defined Benefit Matters

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Management of Reserves

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Remuneration

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Investment Risk Management

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Valuation

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Draft updates to existing superannuation PPGs

APRA also released 3 draft updates to existing superannuation PPGs. The draft PPGS cover the following areas:

Adequacy of Resources

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Contribution and Benefit Accrual Standards

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Payment Standards

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The closing date for submissions on the eight draft PPGs is 4 July 2013.