APRA has used its new directions power, and imposed additional licence conditions, on AMP super.
APRA announced that it has issued directions and put new licence conditions on AMP Superannuation Limited and N.M Superannuation Proprietary Limited – which both make up AMP Super.
The prudential regulator said it had done this to “address a range of concerns regarding AMP Super’s compliance” with the SIS Act.
“The action arises from issues identified during APRA’s ongoing prudential supervision of AMP Super, along with matters that emerged during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.”
“The new directions and conditions are designed to deliver enhanced member outcomes by requiring AMP Super to make significant changes to its business practices. Areas identified for improvement include conflicts of interest management, governance and risk management practices, breach remediation processes, addressing poor risk culture and strengthening accountability mechanisms. The directions also require AMP Super to renew and strengthen its board.”
“Additionally, APRA requires AMP Super to engage an external expert to report on remediation and compliance with the new directions and conditions.”
APRA said this was an example of its “constructively tough” enforcement approach, and noted that this is the second time it has used the directions power it gained in the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No 1) Bill 2019. The first was in relation to the IOOF group.
In response to the action by APRA, AMP said it will “fully implement the directions and additional conditions”.
“We have been working constructively with APRA on this matter and have already taken action on a number of the issues raised.”
“In May 2019, the AMP Limited Board moved to expand the superannuation trustee boards, broadening the range of skills and experience. This, together with a new trustee operating model, is designed to strengthen the independence of the trustees and ensure they continue to work in the best interests of members.”
“In addition, in 2018, AMP significantly reduced fees on our flagship MySuper products, benefiting approximately 600,000 existing members as well as new members. In 2019, AMP also reduced fees to MyNorth, its flagship investment platform, benefitting superannuation members and investors.”