The recent amendments to Prudential Standard SPS250 are further proof that APRA is keeping the superannuation industry on its toes when it comes to members’ best financial interests.  

The Standard requires Registrable Superannuation Entities (RSEs) to further protect members from potential adverse outcomes caused by conflicted life insurance arrangements and, in doing so, include robust decision-making in the negotiation and ongoing review of insurance arrangements.

There is a short implementation window for the revised prudential updates and IQ Group is supporting clients in this regard.

APRA’s primary focus for trustees to select, manage and monitor their group insurance policies will have a significant impact on operations. Here’s our insight into what has changed and where the greatest impact will be felt.

Independent Certification
The first change to note is the requirement to obtain an independent certification to review related party insurance arrangements before entering contracts, or materially altering, an insurance arrangement on a 3 yearly basis.

This is particularly relevant to super funds that are within vertically integrated structures that also deliver group risk insurance.

APRA has made this core change to the standard to ensure that trustees are aware of anything, within insurance arrangements, which may not be in the members’ best financial interest and that an independent external party is engaged to avoid any perceived conflict of interest in confirming this determination.

Priority or privilege
The Standard also requires trustees to avoid any conflicts based on “priority or privilege”. So, what does priority or privilege actually mean?

The changes state that a “priority or privilege” may occur where:

• the terms of an arrangement provide an insurer with a current or future competitive advantage relative to other insurers, or
• the terms of an arrangement favor the insurer relative to the RSE licensees or beneficiaries.

It applies when an insurer is not a connected entity of an RSE licensee but has been selected to provide insurance cover for the RSE’s members.

The recommendations from the Royal Commission outlined that, regardless of the related party status of a group insurer (connected or non-connected), the safeguarding of members’ interests remains the number one priority. Increasing the emphasis on members interests has been an increasing priority for APRA in the past few years.

APRA considers that independent certification is most likely to be provided by auditors, actuaries, or legal firms qualified to offer an unbiased, informed, and independent opinion. However, this will likely result in increased compliance and governance costs which could, in turn, increase administration fees for fund members.

The change will require a fresh new level of transparency when funds arrange and manage group insurance contracts.

Data Management
Another important change is the requirement for RSE’s to strengthen data management and improve analysis of member outcomes across different cohorts. RSEs are required to use the improved analysis to ensure that the type and/or level of insurance offered does not inappropriately erode the retirement income of beneficiaries.

The timeframes around SPS 250 amendments are critical and impacts will be noticed for those insurance arrangements ending after 1 January 2023 (for RSE/Insurer connected entities) and after 1 January 2025 for (non-connected entities). 

The time has come, and APRA is expecting RSEs to get their “insurance house in order”. IQ Group are already working with clients to implement these amendments and ensure they meet their obligations within the very short timeframes.

We’re here to help!

By Tenaiha Fletcher
HIQ Academy Consultant

HIQ Change and Learning Services (HIQCLS), powered by IQ Group, is proud to introduce you to the inaugural participants of our HIQ Academy. The HIQ Academy provides the superannuation industry with the ‘perfect match’ of skills, experience and knowledge. Participants are chosen based on their existing skillset and experience, and receive tailored training to upskill in either superannuation or business disciplines. It is the ideal solution to current recruitment challenges faced by superannuation funds and providers, and our first round of participants are a fine example of the high quality that HIQCLS can offer the industry now and in the future.

Emma Doyle (Melbourne)

I have over 20 years of business analyst experience across various domains including education, not-for-profit and business franchising. Being part of the HIQ Academy is a fantastic opportunity to deepen my knowledge of superannuation with training and mentoring from the leading consultancy in the super industry.

Having recently completed an Advanced Diploma in IT Business Analysis, the HIQ Academy builds on this training by providing insights into how best to help super funds meet current challenges and the exciting opportunities that new technology offers for improving the member experience.

My new colleagues have been very welcoming and supportive. Being part of the HIQCLS team and having access to the extensive knowledge, skills and experience of IQ Group consultants, is for me a key differentiator.

I’m excited to participate in the HIQ Academy and be given a head start in helping clients with their transformation and change journeys.

Ashley Blackburn (Melbourne)

I come to the HIQ Academy with 4 years’ experience in data analytics, data management and data integrity, as well as the creation, design, and maintenance of reports. After completing my Graduate Certificate of Data Analytics, I have chosen to continue my studies and am now working towards my Masters in Business Analytics at Deakin University.

Participating in the HIQ Academy has given me an incredible opportunity. I am offered the support I need to learn everything about the superannuation industry and connect with a wide range of skilled people. Having this huge support network and the ability to join different clients in a range of roles is perfect as it gives me a balance between a singular structured workload and a variety of projects that I enjoy and thrive in.

My first week as part of the HIQ Academy has really given me a great foundation for the industry and a refresher of concepts I already knew. I am amazed and incredibly grateful for the time taken by everyone, to ensure that we have the best foundations and support. We know we can make the connections we need to succeed no matter what role we take on. The team and culture within IQ Group is unlike anything else I have experienced, and it is clear that this has been driven from the top down through all levels of the organisation. Thanks to this support and guidance, I am really excited about what the future holds.

Lynne Kennedy (Brisbane)

I’ve spent many years in the superannuation industry gaining experience and developing valuable knowledge and skills in super and insurance. I’ve worked for super funds and administrators, all with different cultures and values.

Our introduction to the HIQ Academy has shown me that the IQ Group culture is unique and everyone is willing to offer support and assistance to each other. This collaborative approach has reassured me that I will be able to learn and grow within my new role.

While we are experiencing ‘information overload’ at the moment, I know that there will always be someone there to support me along the way. Accepting this unique opportunity to step into a consulting role, with the help of the HIQ Academy, has been one of the best decisions I could make – not only for my career but for enabling me to pursue the life I want to live.

I’m excited to be part of a company that has the respect and trust of an entire industry, to step out of my comfort zone, and to help clients navigate the complexity of an ever-evolving landscape.

Dave Enders (Melbourne)

Over the last 10 years, I’ve held a number of different roles within the superannuation industry in the administration operations space. The HIQ Academy has been the perfect next step in my career as it introduces me to a variety of new skills and experiences.

During my first few weeks in the HIQ Academy, I have refreshed my superannuation fundamentals and been introduced to business capabilities such as Business Analysis, Project Management and more. I am completing a tailored learning pathway and achieved a BABoK certification. I feel ready for my first client engagement and look forward to gaining even more experience in the industry and, in the future, becoming an IQ renowned consultant.

The support and encouragement from all the team members I’ve met so far has been great, and I’m confident I’ve got the experience, skills and support to succeed.

IQ Group takes great pride in developing young talent and kick-starting people’s careers in the finance industry. Here we introduce you to this year’s Graduates who, as per our previous Graduates, have been carefully chosen from an impressive talent pool to be just the right fit for IQ and our clients.

Tennille Christian (Brisbane)

I recently joined IQ Group as a Graduate Consultant after completing a Bachelor of Business, majoring in Management. I have previously gained a wealth of knowledge and experience through project coordination and administration roles within varying industries, and I am thrilled to now take the plunge into the world of consulting with IQ Group.

Following the completion of my degree, I sought to further my career and learning opportunities in business by joining a graduate program. The program offered by IQ Group stood out for me as it provides the opportunity to gain in-depth knowledge across all aspects of both consulting and the superannuation industry. The program initially involves an intensive three-week training program, before stepping straight out into the world of superannuation consulting.

My fellow graduates and I have received a very warm welcome from IQ. We have had the pleasure of spending time with key personnel and executives, all of whom are more than willing to provide support, guidance and encouragement. I am equally excited and grateful to be given the opportunity to be a part of this program and can’t wait to continue my development journey.

Andrew Saba (Melbourne)

I am a recent graduate of Monash University with a bachelor’s degree in Business, majoring in Economics and Marketing. After completing my degree, I spent the next year filling a variety of different roles both in-store and behind the scenes at Dan Murphy’s. During this time, I looked forward to finding my next challenge, and I have now found this in the IQ Group Graduate program.

There were a variety of factors drawing me towards IQ Group, their reputation within the superannuation industry; the ability to work with a large variety of clients, all with differing requirements and expectations allowing me to utilise my problem-solving skills in new and creative ways; as well as the opportunity to push myself out of my comfort zone while growing and enhancing my skill set.

As early as my second day at IQ Group, the team here had already given us a good feel of their values and what they are about. The time taken out by senior team members to show us the ropes and introduce us to the business has been a great look into how the team here operates. Team leaders have already taken us through some of the key requirements and expectations of our role, as well as highlighted the ways that IQ Group can assist us and our learning. The supportive culture and attitude towards personal and professional development makes me excited and I’m looking forward to the next stage of my career.

Abigail Dineen (Melbourne)

I am currently finalising a Bachelor of Information Technology degree at RMIT, majoring in Project Management. I have found during my studies that communication, and working well with peers, have become situations I thrive in and I actively seek opportunities to do these throughout my major studies. While studying IT, I’ve found many opportunities for further development due to its diverse and growing nature and I have been drawn to many avenues in this field. I thoroughly enjoy the many aspects that technology has to offer, its ever-changing nature and how influential it can be to everyone.

IQ’s graduate program will provide me with the opportunity to shadow my degree, where I am able to experience different avenues of the superannuation sector, find my feet in this growing field and learn where my strengths and weaknesses lie. My peers, as well as leaders within IQ, are already encouraging me to bring out the best in myself and my work and I am excited for the opportunities the next 12 months will hold.

IQ Group provides graduates with their career ‘head start’ through training and career development. We provide the right tools and training to ensure our graduates can achieve career success through mentoring, support and e-learning. Our graduates receive:

• a structured program with an initial intensive skills development training boot camp, providing Business Analysis, Project Management, Data and Change skills, as well as RG146 qualification;
• 12 months of formal mentoring by a Principal Consultant;
• great exposure to a variety of work environments and a network of professionals within the industry; and
• valuable experience on a wide range of engagements working with a great IQ Group team and clients.