The Government has unveiled the second tranche of its Stronger Super bill, which contains details about the new obligations of trustees as well as the Australian Prudential Regulation Authority’s (APRA’s) increased powers.
Under the bill, the Superannuation Industry (Supervision) Act 1993 (SIS Act) will be amended to increase the obligations of superannuation trustees and directors. MySuper trustees will have obligations that have not previously applied to trustees of default options, including: a new focus on the net returns of members, an annual assessment of the sufficiency of the fund’s scale, and an investment return target.
Trustees of responsible superannuation entities will also be required to give priority to the interests of beneficiaries, and exercise the same degree of care, skill and diligence as a prudent superannuation trustee (rather than an ‘ordinary prudent person’, as is the case currently).
Trustees must also put into place risk management strategies and operational risk reserves.
The second tranche of the bill will also amend the SIS Act to give APRA the power to issue prudential standards in relation to superannuation.
The closing date for submissions to the exposure draft is 13 January 2012.
