On 24 June 2025, Australian Prudential Regulation Authority (APRA) Deputy Chair Margaret Cole issued a letter to all registerable superannuation entity (RSE) licensees setting out the regulator’s observations, examples of better practice and areas for improvement to support RSE licensees’ compliance with their legal duties, including the best financial interests duty, and achieve better outcomes for their members.

Background

The letter follows a review APRA completed of 14 RSE licensees, with varying scale and business models, where it identified relatively higher levels of expenditure or where the member benefit of specific expenditure was not immediately apparent. APRA analysed the contributing factors of expenditure outcomes, including decision making and conflicts of interest, expenditure management frameworks, and monitoring and reporting.

APRA’s expectations

APRA’s observations are summarised in an appendix to the letter which includes examples of better practice and identified areas for improvement. APRA’s high-level expectations for RSE licensees include:

  • a sound decision-making approach, supported by robust business cases, with clear links to an RSE licensees’ strategic objectives and expected financial outcomes for members;
  • a comprehensive expenditure management framework with clear definitions and expectations, financial thresholds and documented approval requirements, inclusive of a risk assessment;
  • evidenced-based and regular monitoring and reporting processes, that utilises measurable and member-focused outcomes and success, and acting on the insights from these processes; and
  • regular reporting to relevant governance bodies supported by data-driven recommendations, as well as clearly defined review triggers and appropriate actions in response to expenditure which is not achieving its intended outcomes

Next steps for RSE licensees

RSE licensees should rigorously examine their existing expenditure processes – across decision-making, expenditure management frameworks and monitoring and reporting – in light of this letter and the updated Superannuation Prudential Standards SPS 515 Strategic Planning and Member Outcomes which commences on 1 July 2025.

How we can help

APRA’s letter makes it clear that where an RSE licensee’s practices are found wanting, it will not hesitate to use all regulatory tools at its disposal to hold that licensee to account. We can assist RSE licensees with reviewing their expenditure by providing expertise in areas such as governance, risk management and compliance with regulatory requirements including SPS 515. Additionally, we can offer support in developing and implementing robust expenditure policies and procedures, as well as conducting independent reviews to identify potential weaknesses and areas for improvement