What APRA’s New Tough Approach Means For Super Funds

What APRA’s New Tough Approach Means For Super Funds

Super funds have just one year to justify their existence under tough new rules just released by the Australian Prudential Regulation Authority (APRA).

APRA will be using these new rules to target underperforming funds and drive increased fund mergers.

APRA is not waiting on the final reports of the Productivity Commission or the Financial Services Royal Commission, and these requirements do not require legislation. Amongst the many pieces of superannuation legislation before Parliament are Bill that would give APRA more powers with which to drive these requirements, but they are not absolutely required for these new rules..

The new requirements compel super funds to annually benchmark and evaluate the performance of their MySuper, choice, legacy and defined benefit products in delivering sound, value-for-money outcomes to all members. The new ‘outcomes assessment’ sets a higher bar for super funds that must be reflected in their strategic and business planning.

Unlike some other changes (such as the new requirements for reporting to the ATO), these are not requirements that can be handed over to third party providers to fulfil. These changes are fairly and squarely the responsibility of super fund boards and their trustee offices.

APRA has released a new Prudential Standard 515 on Strategy Planning and Member Outcomes and supported this with Prudential Practice Guide SPG 516 Outcomes Assessment. The prudential standard sets out outcomes and key requirements, while the PPG is about designing, undertaking and using the outcomes assessment.

APRA is not telling funds the metrics they need to measure outcomes, although they have given these examples of what could be used:

  • net investment returns, on an absolute basis, as well as relative to relevant benchmarks and risk/return targets over different time periods (e.g. one year, 3 years, 5 years and 10 years);
  • fee levels, including costs per member;
  • administration and operating expenses as a percentage of average net assets; and
  • level and cost of insurance cover (by insurance type), including measures of account erosion such as the premium as a percentage of salary.

Except for insurance, APRA has not suggested using broader industry benchmarks. It is likely super funds will look for the development of new benchmarks and will be involved in an iterative process, talking to other funds, industry associations, regulators and service providers about the best way forward.

They have characterised the implementation of the assessment “as a process of continual improvement” that will “evolve over time”.

When other requirements have been introduced – such as when MySuper was developed – APRA have said they don’t want a ‘cookie-cutter’ approach. However, it’s not completely clear what approach they do expect and what minimum outcomes are required.

APRA have said that funds “are expected to set targets or goals that are not already being achieved or are not likely to be very easily achieved based on existing forecasts.” This will be a challenging for both high performing funds and those that already need to improve their outcomes.

These new requirements will be given the highest priority by super funds even through the details will take time to become clearer. As funds develop their outcomes assessment models and these become known throughout industry and APRA gives their preliminary evaluation of different approaches, funds will need to be adaptable in their responses.

IQ Group works with very many super funds and service providers, and is developing tools to help funds respond quickly, comprehensively, and with agility to this exciting new environment in which members interests are paramount.

In the new year, IQ Group will provide our clients a framework for action to address the critical need for reporting and analysis. To ensure your fund has the tools to respond quickly and comprehensively, contact us at enquiries@iqgroup.com.au.

The Annual IQ Group Leadership Day

The Annual IQ Group Leadership Day

Recently, IQ Group held their Annual Conference. It was attended by employees from all across the country. Each year IQ Group holds a leadership day before the Annual Conference kicks off. This day is a great opportunity for the IQ Group leadership team to come together, learn from each other and address the challenges they are facing.

This year the Leadership Day was broken down into three parts:

  1. Reflection on Leadership in 2018 – A chance to look back on the past year and identify what worked, and what challenges were faced.
  2. Inspirational Leading – Learning techniques to better communicate with, inspire and engage peers and team members.
  3. Leading in 2019 – Identifying solutions to better support our clients and staff in 2019 across 4 key areas of the business.

We went around and asked several of the Leadership Day attendees what their favourite parts of the day were, and what they learned:

“I enjoyed the ‘Inspire’ activity where we had to team up with another team leader to talk about a topic and inspire them. We took turns to inspire the other person in a short amount of time (a minute or two). Then we were assigned a different team leader and told to convey the same message in four sentences. This activity helped us to be more articulate and convey the message in an inspiring way and to think quick and capture the other person’s attention.” — Santosh Richard, Senior Consultant

“I think this year’s team leadership conference was the best we have had.  We have been working towards smart autonomy and something that came up was we need to build on our processes. Building on our processes allows our leadership team to make decisions while understanding the impact it as on the rest of the business.” — Belinda McKinlay, Senior Consultant

“Definitely the best conference I have attended. The part that resonated was empowering the leaders to make decisions to benefit IQ.” — Jocelyn Adolphe, Senior Consultant

“My favourite part of the conference was catching up with colleagues at different client sites and also from different states. It’s always great to catch up with people whom you have been in contact with throughout the year – the conference allows us the opportunity to reconnect with them all and in some instances thank them in person for the assistance they have provided during the year.

Another great part of the conference were the reflection sessions where we discussed the challenges and accomplishments for the past year as it allowed us the opportunity to share our experiences and further understand the challenges that others have faced in the previous 12 months. This allows us to refocus on our own accomplishments as these can be easily clouded by how busy we all are moving from one task to the next.” — Lilian Wade, Principal Consultant

“The best part of the leadership day for me was reconnecting with the leaders from interstate and working with them on group activities. We don’t have the opportunity to do this that often so it’s something I particularly look forward to.” — Steven Pulver, Consultant Business Analyst

“Overall, I think it was the best conference we’ve had thus far, both from a fun aspect and a staff engagement and contribution perspective. I found that this year’s conference was more about staff providing input and their thoughts, as opposed to staff just listening.” — George Liras, Principal Consultant

Is your Super Fund implementing the Insurance in Superannuation Voluntary Code of Practice?

Is your Super Fund implementing the Insurance in Superannuation Voluntary Code of Practice?

Well, MAAS is going to have a major impact on your Insurance Claims Handling!

Through the adoption of the Insurance in Super Voluntary Code of Practice (Code), Super Funds will have a more visible role in the insurance claims process and will generally need to process claims in a shorter timeframe.

Super Funds are required to publish their Code transition plans by 31 December 2018. The implementation of the Code includes compliance with new claims handling standards. These new standards will be challenging for many Funds.

There is an emerging industry awareness of all the issues that will compound and challenge a Super Fund’s ability to comply with the claims handling requirements. The good news is IQ Group has developed and redesigned claims handling processes and solutions for Funds in the past to increase efficiency and meet tighter timeframes.

The new Super Fund reporting requirements to the Australian Taxation Office (ATO) via the Member Account Transaction Service (MATS) and Member Account Attribute Service (MAAS) is one of the developments impacting on implementation of the Code. These requirements were introduced in October 2018 and become mandatory in April 2019.

MAAS reporting includes the Provision of Details (POD) module which enables the ATO to notify Super Funds about the death of their members. This will result in many additional notifications to be accepted and managed by Funds.  Death notifications are not always now received for low balance accounts.  It is expected that the additional notifications from the ATO will have an impact on time, resources and implementation plans for ongoing and new remediation projects.

The receipt of death notifications from the ATO will require Super Funds to commence the notification of beneficiaries and then trigger a Fund to process additional benefit payments.  Couple this with the fact that deceased members cannot be sent to an Eligible Rollover Fund for an extended amount of time (minimum of two years), there will be more demand on Funds to process a higher volume of claims and do so in a manual and resource intensive manner. Additional claims may be more expensive to process for many Funds. Potentially, this might mean Super Funds may now be required to process many more insurance claims, much faster.

To explore these issues and investigate possible solutions, the IQ Group is holding two Claims Handling discussion groups for Super Funds and Service Providers. These forums are free and will be held at IQ Group offices – Tower 5, Level 20, 727 Collins Street, Melbourne 3008 and Level 4, 31 Market Street, Sydney, NSW 2000. The one-hour discussion groups will be held on these dates and times:

Melbourne: Tuesday, 5th February 2019, 4:30 -5:30 pm

Sydney: Tuesday 12th February 2019, 4:30 – 5:30 pm

To register for these workshops please email sgosios@iqgroup.com.au directly, or call him on 0400 051 801.


Sam Gosios, Managing Principal of IQ Group

IQ Group Conference 2018 – Discover, Innovate, Connect

IQ Group Conference 2018 – Discover, Innovate, Connect

IQ Group took time out for our 3rd annual staff conference. With our staff spread across the east coast of Australia, and often out amongst many clients, this is always a great time for us to be together, to reflect, learn and share. This year did not disappoint as we took on the challenge to DISCOVER INNOVATE & CONNECT.


Simon Sinek has well and truly coined the phrase “Start with why”. At IQ Group, there has never been any doubt of our purpose – our why. In fact, most of our people will quickly tell you that it is “To provide the best possible future for our people, our customers, our business and the Industry”.

But this year’s conference took us beyond 2020 and encouraged us all to design a new world that would have the best possible future for us all.

Through the magic of technology our team created an IQ Group that continued to be passionate about delivering solutions to its clients in the Super, Wealth, Banking and Insurance industries. Our people are continuously developed professionally and thought leaders in their areas of speciality and continue to add value to the industry through supporting clients and the industry in the development of policy that enables a better future for all.



As consultants, most of our time is spent with our clients, so our conference is always a great opportunity to put our heads together and brain storm the everyday challenges that face both IQ Group and its customers.

Through the inspiration of mind mapping, our teams boldly tackled a vast array of topics from work/life balance and professional development to the implementation of new regulatory change and the unique skills IQ Group brings to the table. Without a doubt the complexity of our industry and the challenges we face will continue to motivate and inspire the IQ team through 2019.


By far the biggest part of IQ Group’s vision is in the connections we make in relationships both internally and across our customers and the industry.

This year we allowed a creative license and through the development of graffiti boards (and perhaps a little too much glitter) we knew that our mantra of Trust and Purpose will continue to drive us into the year ahead.

There was time for a bit of team building and some healthy competition as we took on the Battle of the Nations. Our Brazilian team showed right from the start that they were in it to win it and didn’t hold anything back.

But for me the best part of our conference is always when IQ staff congratulate and acknowledge each other with our Kudos Awards and Wall of thanks. From the simplest words of encouragement to the amazing efforts of our teams to successfully deliver for our customers, we recognise each and every step along the way.

For me this was a return to work after 5 months of cancer treatment. Forever grateful for the support of our CEO and my boss Brian Peters; my peers, the executive team at IQ Martha Villamil and David Haynes and to the whole IQ team, the most talented and dedicated people I have ever known. Looking forward to a fantastic 2019.

#iqfamily #iqconference2018 #DiscoverInnovateConnect

Written by Katherine Forrest, Head of Customer