APRA seeks improvements from Superannuation Licensees on Conflicts of Interest

APRA has written to RSE Licensee’s seeking enhanced oversight of outsourcing arrangements with related parties to manage conflicts of interest.

APRA’s review of 14 licensees had been prompted by a concern that for some trustees commercial arrangements with related parties may be taking  precedence over outcomes delivered to members.   APRA concluded that:

  • ensuring related party contracts are for a set period with clear termination dates;
  • ensuring contracts have clear and measurable performance indicators which are monitored by the RSE licensee;
  • conducting rigorous market based benchmarking when engaging or renewing contracts to ensure terms and prices are competitive;
  • proactive documentation how decision to use related party service providers are in the best interests of members.

APRA Deputy Chairman Helen Rowell, said “RSE Licensees employing better practices rigorously tested the market before agreeing or renewing contracts with related parties.  They assessed the contracts’ materiality in line with APRA’s requirements and documented their decision making process that concluded the arrangement was in their members’ best interests.”

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