{"id":"F2024L00940","name":"Superannuation (prudential standard) determination No. 5 of 2024","slug":"superannuation-prudential-standard-determination-no-5-of-2024","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":105310,"registerId":"commonwealth-F2024L00940-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Authority","sectionType":"part","heading":"Authority","content":"# Authority\n\n1.  This Prudential Standard is made under section 34C and pursuant to section 29XA of the Superannuation Industry (Supervision) Act 1993 (SIS Act).","sortOrder":0},{"sectionNumber":"Application and commencement","sectionType":"part","heading":"Application and commencement","content":"# Application and commencement\n\n2. This Prudential Standard applies to all registrable superannuation entity (RSE) licensees (RSE licensees).[\\[1\\]](#_ftn1)\n\n3. Paragraphs 33 to 43 only apply to an RSE licensee that is authorised, or was formerly authorised, to offer a class of beneficial interest in a regulated superannuation fund as a MySuper product.[\\[2\\]](#_ftn2)\n\n4. An RSE licensee is not required to comply, in relation to a pooled superannuation trust[\\[3\\]](#_ftn3), with:\n\n    (a) paragraph 8 (only in relation to the Board being required to approve strategic objectives that support achieving outcomes for beneficiaries);\n    (b) paragraphs 9(a), 9(b) and 9(g);\n    (c) paragraph 10;\n    (d) paragraphs 14 and 15;\n    (e) paragraphs 21 to 24 inclusive (only in relation to outcomes for beneficiaries and section 62 of the SIS Act (‘the sole purpose test’));\n    (f) paragraphs 25 and 26(b) (only in relation to outcomes for beneficiaries, the sole purpose test and promoting the financial interests of beneficiaries);\n    (g) paragraphs 27 to 29 inclusive;\n    (h) paragraphs 30 to 32 inclusive (in relation to outcomes to beneficiaries, the annual performance assessment and a transfer of beneficiaries)[\\[4\\]](#_ftn4); and\n    (i) paragraphs 33 to 43 inclusive.\n\n5. This Prudential Standard commences on 1 July 2025.","sortOrder":1},{"sectionNumber":"Interpretation","sectionType":"part","heading":"Interpretation","content":"# Interpretation\n\n6. Where this Prudential Standard provides for APRA to exercise a power or discretion, the power or discretion is to be exercised in writing.","sortOrder":2},{"sectionNumber":"Adjustments and exclusions","sectionType":"part","heading":"Adjustments and exclusions","content":"# Adjustments and exclusions\n\n7. APRA may adjust or exclude a specific requirement in this Prudential Standard in relation to:\n\n    (a) a particular RSE licensee of an RSE; or\n    (b) specified RSE licensees of RSEs.","sortOrder":3},{"sectionNumber":"Strategic objectives","sectionType":"part","heading":"Strategic objectives","content":"# Strategic objectives\n\n8. An RSE licensee must set specific strategic objectives for the sound and prudent management of its business operations that support achieving the outcomes the RSE licensee seeks for beneficiaries. The strategic objectives must be approved by the Board.[\\[5\\]](#_ftn5)\n\n9. The strategic objectives must be informed by an RSE licensee’s consideration of:\n\n    (a) the specific outcomes that the RSE licensee seeks to achieve for beneficiaries;\n    (b) changes to the RSE licensee’s business operations that the RSE licensee considers, consistent with paragraph 14 of this Prudential Standard, are likely to improve outcomes for beneficiaries or the sound and prudent management of its business;\n    (c) the RSE licensee’s risk appetite statement;\n    (d) the strategies formulated pursuant to sections 52(2)(i), 52(6)(a), 52(7)(a), 52(8)(a) and 52(8A)(a) of the SIS Act;\n    (e) the financial resources deemed necessary to cover the operational risk that relates to the RSE under section 52(8)(b) of the SIS Act;\n    (f) the most recent business performance review;\n    (g) the duty to act in the best financial interests of beneficiaries; and\n    (h) the sole purpose test.\n\n10. An RSE licensee must ensure its retirement income strategy is subject to review of its appropriateness, effectiveness and adequacy at least every three years.[\\[6\\]](#_ftn6)","sortOrder":4},{"sectionNumber":"Business plan","sectionType":"part","heading":"Business plan","content":"# Business plan\n\n11. An RSE licensee must create and maintain a written rolling plan, of at least three years’ duration, that covers the entirety of the RSE licensee’s business operations (business plan). The business plan must be approved by the Board and set out the RSE licensee’s approach for implementing and delivering on its strategic objectives.\n\n12. An RSE licensee’s business plan must specify:\n\n    (a) the key initiatives it will undertake to achieve the RSE licensee’s strategic objectives, including for each initiative, the expected cost, how it will be funded and the expected results;\n\n(b) where an RSE licensee has decided to undertake a transfer of beneficiaries, remedial action or other recovery or exit activities, how this decision will be implemented. This includes, where necessary, adjusting key strategic initiatives and maintaining business operations during implementation.\n\n13. An RSE licensee must be able to demonstrate how the business plan reflects the RSE licensee’s view of its current, and expected, level of financial resources, informed by[\\[7\\]](#_ftn7):\n\n    (a) financial projections that demonstrate the ongoing financial soundness of the RSE licensee’s business operations, including under different potential scenarios, for at least the term of the business plan; and\n    (b) key assumptions used in the required financial projections and how these assumptions take into account the material risks identified under the risk management framework.\n\n14. The business plan must be updated annually having regard to the results of the most recent business performance review and ongoing monitoring. The annual updates to the business plan must incorporate changes to the RSE licensee’s business operations that the RSE licensee considers are likely to improve outcomes for beneficiaries or the sound and prudent management of its business operations including, but not limited to, changes arising from recovery and exit planning activities required under Prudential Standard CPS 190 Recovery and Exit Planning or changes arising from remedial actions or transfer planning required under this Prudential Standard.","sortOrder":5},{"sectionNumber":"Financial resource management","sectionType":"part","heading":"Financial resource management","content":"# Financial resource management\n\n15. An RSE licensee must have a robust approach to the management of the financial resources available to support achieving the outcomes sought for beneficiaries and the sound and prudent management of the RSE licensee’s business operations.","sortOrder":6},{"sectionNumber":"Setting fees","sectionType":"division","heading":"Setting fees","content":"### Setting fees\n\n16. An RSE licensee must set each fee prudently and transparently. This includes demonstrating why the RSE licensee is satisfied, with respect to a fee charged to beneficiaries or a fee charged by the RSE licensee out of an RSE, that:\n\n    (a) the charging of the fee, including determining the amount of the fee, complies with its legal duties and obligations; and\n    (b) the fee is appropriate and proportionate, having regard to factors such as the arm’s length value of the features and services that the fee relates to, comparable fees charged in relation to comparable RSEs and financial resources currently available to the RSE licensee.\n\n17. An RSE licensee must ensure that the use of any new fee power, or the use of an existing power for the first time, is approved by the Board.","sortOrder":7},{"sectionNumber":"Management of reserves","sectionType":"division","heading":"Management of reserves","content":"### Management of reserves\n\n18. An RSE licensee’s strategy for the prudent management of reserves must demonstrate the need for, and purpose of, each reserve in the RSE licensee’s business operations.[\\[8\\]](#_ftn8) An RSE licensee’s reserving strategy must include:\n\n    (a) how each reserve is managed in the context of its purpose; and\n    (b) an appropriate target amount or range for each reserve, including how and over what period the reserve is to be established and replenished in an equitable manner, with reference to different cohorts of beneficiaries, and intergenerational issues.\n\n19. An RSE licensee’s regular review of each reserve must ensure:\n\n    (a) the reserve remains appropriate to the RSE’s circumstances; and\n    (b) there are adequate controls and procedures to ensure the reserve is used for the intended purpose.","sortOrder":8},{"sectionNumber":"Management of other financial resources","sectionType":"division","heading":"Management of other financial resources","content":"### Management of other financial resources\n\n20. An RSE licensee must have controls to ensure prudent management of financial resources held at the trustee company level and to ensure it is in a sound financial position. Such controls include, at a minimum, a capital management plan to govern the permitted use of financial resources held at the trustee company level.[\\[9\\]](#_ftn9)","sortOrder":9},{"sectionNumber":"Expenditure management[10]","sectionType":"division","heading":"Expenditure management[10]","content":"### Expenditure management[\\[10\\]](#_ftn10)\n\n21. An RSE licensee must ensure that its expenditure decisions are for the purposes of the sound and prudent management of its business operations and are consistent with all legal duties and obligations of the RSE licensee, including the duty to act in the best financial interests of beneficiaries and the sole purpose test.\n\n    22. When making expenditure decisions relating to its business operations, an RSE licensee must positively demonstrate, at a minimum:\n\n    (a) the purpose of the expenditure, including how the expenditure will contribute to the RSE licensee meeting its strategic objectives and outcomes sought for beneficiaries, together with consideration of any previous assessment by the RSE licensee of whether the expenditure or type of expenditure has achieved its intended purpose;\n    (b) where the expenditure has been incurred for a proper purpose and may also result in incidental benefits to beneficiaries or others, why, in such circumstances, the expenditure remains consistent with all legal duties and obligations of the RSE licensee;\n    (c) how the expenditure will be funded; and\n    (d) how the expenditure will be monitored, including the metrics used to determine delivery of expected outcomes, the circumstances that would trigger a review of the decision and timely action.","sortOrder":10},{"sectionNumber":"Monitoring","sectionType":"part","heading":"Monitoring","content":"# Monitoring\n\n    23. An RSE licensee must monitor progress against its strategic objectives and the business plan to prompt remedial action or transfer planning where expected outcomes sought for beneficiaries are not being, or are unlikely to be, achieved, using key performance indicators and triggers determined for this purpose.\n\n24. An RSE licensee must set triggers that identify to an RSE licensee the need to commence taking action to improve outcomes expected to be achieved for beneficiaries or to commence preparation for a transfer of beneficiaries. These triggers must, at a minimum, include failing or expecting to fail the legislated annual performance assessment in section 60C(2) of the SIS Act.","sortOrder":11},{"sectionNumber":"Business performance review","sectionType":"part","heading":"Business performance review","content":"# Business performance review\n\n25. An RSE licensee must, on an annual basis, review its performance in achieving its strategic objectives, informed by the RSE licensee’s monitoring of key performance indicators and triggers. The results of the review must be used to improve the RSE licensee’s business operations for the benefit of beneficiaries.\n\n26. An RSE licensee’s business performance review must assess and demonstrate, at a minimum:\n\n    (a) whether the strategic objectives are being met, including an explanation of what has driven this assessment;\n    (b) the outcomes achieved for beneficiaries, having regard to:\n\n(i) different cohorts of beneficiaries, including beneficiaries who are retired or approaching retirement (and sub-classes of those beneficiaries)[\\[11\\]](#_ftn11);\n\n(ii) objective internal and external benchmarks; and\n\n(iii) the outcomes assessments under section 52(9) of the SIS Act, including having regard to the latest determinations (if any) made by APRA under section 60C(2) of the SIS Act that relate to the product.","sortOrder":12},{"sectionNumber":"Annual outcomes assessment","sectionType":"part","heading":"Annual outcomes assessment","content":"# Annual outcomes assessment\n\n27. An RSE licensee must, at a minimum, document the methodology applied in undertaking the annual outcomes assessment under section 52(9) of the SIS Act, including:\n\n    (a) how the RSE licensee has balanced the factors it must have regard to under sections 52(10) or (10A) and section 52(11) of the SIS Act and any benchmarks under the Superannuation Industry (Supervision) Regulations 1994 (the SIS Regulations) in making its overall determination(s) under section 52(9); and\n    (b) how the RSE licensee has determined the products it will use for the purposes of comparing its MySuper or choice products.\n\n28. For the purposes of comparing a MySuper product with other MySuper products under section 52(9)(a)(i) of the SIS Act, an RSE licensee must calculate the comparison factors as follows:\n\n    (a) for section 52(10)(a)-(b) of the SIS Act, use the methodologies set out in Reporting Standard SRS 705.0 Components of Net Return and Reporting Standard SRS 705.1 Investment Performance and Objectives; and\n    (b) for section 52(10)(c) of the SIS Act, use the methodology set out in Reporting Standard SRS 700.0 Product Dashboard.\n\n29. Pursuant to section 52(11)(e) of the SIS Act, in determining whether the financial interests of beneficiaries of the RSE who hold a MySuper product or choice product are being promoted, an RSE licensee must also assess the following matters:\n\n    (a) whether, because of the scale of, and within, the RSE licensee’s business operations, those beneficiaries are disadvantaged;\n    (b) whether the operating costs of the RSE licensee’s business operations are adversely impacting the financial interests of those beneficiaries; and\n    (c) whether the basis for the setting of fees is appropriate for those beneficiaries.","sortOrder":13},{"sectionNumber":"Remedial actions and transfer planning[1","sectionType":"part","heading":"Remedial actions and transfer planning[12]","content":"# Remedial actions and transfer planning[\\[12\\]](#_ftn12)\n\n    30. An RSE licensee must be able to demonstrate how it is taking timely remedial action where expected outcomes it seeks for beneficiaries are not being achieved, including where relevant triggers have been met as set out in paragraph 24 of this Prudential Standard.\n\n31. An RSE licensee must take appropriate and timely steps to prepare for circumstances that may necessitate a transfer of beneficiaries out of, or into, its RSE(s), including where relevant triggers have been met as set out in paragraph 24 of this Prudential Standard.\n\n32. Where an RSE licensee has received a determination from APRA that one or more of its products has not met the requirements of the legislated annual performance assessment under section 60D(1) of the SIS Act, the RSE licensee must document its plan for responding to this determination in a timely manner. This plan may include, but is not limited to:\n\n    (a) remedial actions to improve the performance of such products; and\n    (b) commencing preparations for a transfer of beneficiaries.\n\nAn RSE licensee must notify APRA if it has activated a plan made for the purposes of this paragraph.[\\[13\\]](#_ftn13)","sortOrder":14},{"sectionNumber":"Transfer of MySuper product assets","sectionType":"part","heading":"Transfer of MySuper product assets","content":"# Transfer of MySuper product assets\n\n33. Paragraphs 33 to 43 of this Prudential Standard only apply if an authority of an RSE licensee to offer a class of beneficial interests in a regulated superannuation fund as a MySuper product is cancelled, or if APRA notifies an RSE licensee that its authority to offer a MySuper product may be cancelled, by APRA under subsection 29U(1) of the SIS Act.\n\n34. The Board is accountable for ensuring that, following the cancellation of an authority to offer a MySuper product, any affected MySuper product assets are transferred into another MySuper product within the timeframe stipulated in section 29SAB of the SIS Act.[\\[14\\]](#_ftn14)\n\n35. The Board must ensure that there are clear roles and responsibilities at a senior executive level for the purpose of meeting the requirements in paragraphs 36 to 43 of this Prudential Standard.","sortOrder":15},{"sectionNumber":"Planning for a transfer of MySuper produ","sectionType":"division","heading":"Planning for a transfer of MySuper product assets","content":"### Planning for a transfer of MySuper product assets\n\n36. Where APRA notifies an RSE licensee that its authority to offer a MySuper product may be cancelled by APRA[\\[15\\]](#_ftn15), the RSE licensee must document, within a time period specified by APRA, a plan that demonstrates preparedness to transfer any MySuper product assets to another MySuper product (MySuper assets transfer plan).[\\[16\\]](#_ftn16)\n\n37. An RSE licensee must nominate a MySuper product to receive the MySuper product assets (the receiving MySuper product) that meets the following requirements[\\[17\\]](#_ftn17):\n\n(a) the RSE licensee of the receiving MySuper product has determined, in writing, in its most recent annual determination, that the financial interests of the beneficiaries who hold the MySuper product are being promoted by the RSE licensee[\\[18\\]](#_ftn18); and\n\n(b) APRA has determined that the receiving MySuper product has met the requirement in relation to the most recent legislative annual performance assessment and is not closed to new members.[\\[19\\]](#_ftn19)\n\n38. An RSE licensee must ensure that its MySuper assets transfer plan has regard to:\n\n(a) the RSE licensee’s risk appetite as set out in its risk management framework[\\[20\\]](#_ftn20);\n\n(b) the RSE licensee’s business plan; and\n\n(c) any other plans developed and maintained pursuant to this Prudential Standard, CPS 190 and Prudential Standard CPS 900 Resolution Planning.\n\n39. An RSE licensee’s MySuper assets transfer plan must, at a minimum, include:\n\n(a) the governance arrangements for the transfer of MySuper product assets, including the role of the Board;\n\n(b) a description of the roles and responsibilities of stakeholders with a key role in the transfer process;\n\n(c) the name of the MySuper product to which the RSE licensee considers that the assets should be transferred[\\[21\\]](#_ftn21);\n\n(d) the name of the receiving RSE licensee that has agreed in-principle to receive the MySuper product assets from the transferring RSE licensee; and\n\n(e) a communication strategy that will be deployed in the event that the authority to offer a MySuper product is cancelled.\n\n40. APRA may require an RSE licensee to develop and implement additional actions to support the orderly transfer of MySuper product assets to a receiving MySuper product.","sortOrder":16},{"sectionNumber":"Undertaking a transfer of MySuper produc","sectionType":"division","heading":"Undertaking a transfer of MySuper product assets","content":"### Undertaking a transfer of MySuper product assets\n\n41. If an RSE licensee’s authority to offer a MySuper product is cancelled, the RSE licensee must:\n\n(a) implement the MySuper assets transfer plan;\n\n(b) report to APRA on progress of the transfer of MySuper product assets as required; and\n\n(c) transfer the MySuper product assets to the receiving MySuper product.\n\n42. An RSE licensee must provide all reasonable assistance to the receiving RSE licensee to ensure that the transfer of MySuper product assets to the receiving MySuper product is completed in accordance with this Prudential Standard.\n\n43. An RSE licensee must notify APRA within 10 business days once the transfer of MySuper product assets has been completed.","sortOrder":17}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":7,"scope_assessment":{"changed":false,"description":"This appears to be a consolidated or updated prudential standard that maintains focus on its original purpose: ensuring sound and prudent management of superannuation entities with a member outcomes focus. The scope aligns with the SIS Act framework and does not appear to have expanded beyond the traditional prudential supervision remit of APRA. The MySuper transfer provisions (paragraphs 33-43) are a specific operational requirement tied to existing licensing cancellation powers under section 29U, not an expansion into new regulatory territory."},"complexity_factors":["Extensive cross-referencing to the SIS Act (Superannuation Industry (Supervision) Act 1993) and other prudential standards (CPS 190, CPS 900, SRS reporting standards)","Multiple conditional application rules—paragraphs 33-43 only apply to MySuper products, paragraph 4 lists 9 specific exemptions for pooled superannuation trusts with partial exclusions","Nested obligations requiring demonstration of compliance (e.g., paragraphs 16, 22, 30 require positive demonstration of satisfaction/compliance)","Dual-layer governance requirements (Board approval for strategic objectives, business plan, new fees; senior executive accountability for transfers)","Integration with external regulatory frameworks (annual performance assessments under section 60C, outcomes assessments under section 52(9), sole purpose test in section 62)","Defined terms used but not defined within the instrument itself (RSE licensee, MySuper product, sole purpose test, APRA), requiring external knowledge","Temporal complexity with rolling 3-year plans, annual reviews, and 10-day notification requirements","Multiple cohort analysis requirements (different beneficiary groups, retired vs approaching retirement, intergenerational equity)"],"plain_english_summary":"This Prudential Standard (SPS 515) requires superannuation trustees (RSE licensees) to run their operations with strategic and 3‑year business plans, prudent financial controls, transparent spending justified as benefiting members, and active performance monitoring to protect member outcomes.  \n\nIt also mandates contingency planning for poor performance or loss of MySuper status, affecting all RSE licensees (with some exceptions for pooled trusts) to safeguard Australians’ retirement savings."},"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":false,"description":"The instrument, read on its face, applies to all RSE licensees with specified carve-outs for pooled superannuation trusts and additional MySuper‑specific provisions. The text does not state it alters the statutory scope set by the SIS Act or otherwise indicate a deliberate narrowing or widening of scope relative to prior instruments; it sets new prudential requirements and APRA may adjust or exclude requirements in writing (paragraphs 4, 6, 7)."},"complexity_factors":["Extensive cross-references to the SIS Act (e.g. sections 29U, 52, 60C, 60D) requiring alignment of duties with statutory tests and assessments (see Authority, paragraphs 9(d), 26, 28, 33).","APRA discretion to adjust or exclude requirements in writing, adding administrative uncertainty about uniform application (paragraphs 6 and 7).","Multiple governance and approval layers (Board approvals for strategic objectives, business plans, new fee powers and reserves) increasing internal control and reporting burdens (paragraphs 8, 11, 16, 18).","Detailed financial-resource and planning requirements including scenario-based financial projections, capital management plans and reserving strategies (paragraphs 13, 15, 18, 20).","Monitoring, trigger-setting and mandatory annual performance/outcomes assessments tied to remedial and transfer planning, requiring systems for KPIs, benchmarks and cohort analysis (paragraphs 23–29, 31–32).","Specific, time‑sensitive MySuper transfer planning and implementation obligations when APRA signals or effects cancellation, including nominee/receiving-product conditions and reporting to APRA (paragraphs 33–43).","Interplay with other prudential standards (CPS 190, CPS 900) and reporting standards (SRS 700/705) creating coordination and technical compliance requirements (paragraphs 14, 28, 38).","Exemptions and carve-outs (pooled superannuation trusts and limited applicability of some paragraphs) add interpretive complexity for scope of application (paragraph 4)."],"plain_english_summary":"This Prudential Standard requires all registrable superannuation entity (RSE) licensees to adopt board‑approved strategic objectives, maintain a rolling three‑year business plan, manage financial resources and reserves prudently, set and approve fees transparently, monitor outcomes for beneficiaries, conduct annual performance and outcomes assessments, and prepare remedial and transfer plans where performance or MySuper authorisation is at risk. It also sets specific planning and implementation steps when APRA cancels or signals cancellation of a MySuper authorisation. Trustees bear compliance costs and APRA may adjust requirements in writing."},"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"}},"importantCases":[],"_links":{"self":"/api/acts/superannuation-prudential-standard-determination-no-5-of-2024","history":"/api/acts/superannuation-prudential-standard-determination-no-5-of-2024/history","analysis":"/api/acts/superannuation-prudential-standard-determination-no-5-of-2024/analysis","conflicts":"/api/acts/superannuation-prudential-standard-determination-no-5-of-2024/conflicts","importantCases":"/api/acts/superannuation-prudential-standard-determination-no-5-of-2024/important-cases","documents":"/api/acts/superannuation-prudential-standard-determination-no-5-of-2024/documents"}}