Super Alert – 28 February 2025: APRA and ASIC Priorities, Updated transfer balance cap, Family Law Superannuation

Welcome to the weekly KHQ Super Alert. This week the APRA and ASIC chairs appeared before Senate Committees noting their work and priorities in relation to superannuation. Quarterly statistics reveal the continuing increase in superannuation assets to over $4 trillion. The ATO transfer balance cap will be indexed to $2 million on 1 July 2025, and rewritten family law superannuation regulations will take effect on 1 April 2025.

APRA – Speech by Chair, John Lonsdale

On 27 February 2025, the APRA Chair, John Lonsdale gave an opening statement to the Senate Economics Legislation Committee.

In relation to superannuation, he focused on the following:

• ‘APRA continues to drive greater transparency, performance and trustee accountability to improve retirement outcomes for members.’
• ‘APRA has intensified its scrutiny of expenditure by funds, to improve practices and reduce spending that is not in the best financial interests of fund members.’
• ‘While supervision continues to be APRA’s primary tool to protect the financial interests of the community, APRA will use its broad range of enforcement powers to prevent and address serious prudential risks.’

In addition, he noted several cross-industry initiatives which will take effect this year:

• ‘From mid-March, the Financial Accountability Regime will extend beyond banking to include APRA-regulated entities in insurance and superannuation.’
• ‘Operational risk management requirements under new standard CPS 230 will take effect from 1 July.’
• ‘APRA will conduct its first financial system-wide stress test to deepen its understanding of the potential impact and sources of risk that might emerge and transmit across the system in the event of a system-wide shock scenario.’

Finally, he noted that ‘APRA will shortly release a discussion paper as we begin the process of updating our prudential standards on governance. … Our proposals for consultation aim to enhance board performance and ensure boards are governed by directors with the skills, experience and character needed for today’s complex risk environment.’

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ASIC – Speech by Chair, Joe Longo

On 27 February 2025, the ASIC Chair, Joe Longo gave an opening statement to the Senate Economics Legislation Committee 2024-2025 Additional Budget Estimates. Notably, he spoke in relation to simplification and enforcement:

• ‘The ASIC Simplification Consultative Group (ASCG) held its first meeting this week to discuss how we can more efficiently and effectively administer the law. … The ASCG will identify how we can more efficiently and effectively administer the law, how we can cut back on unnecessary bureaucracy and how we can simplify guidance and legislative instruments.’
• ‘Our 2025 enforcement priorities … reflect our strong focus on investor and consumer protection in the face of increasing cost of living pressures. … We will detect, investigate and prosecute unlawful conduct that seeks to take advantage of consumers and investors. … We will target conduct that exploits superannuation savings, with a particular focus on fraudulent property investment schemes.’

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APRA – Quarterly superannuation statistics

On 27 February 2025, APRA released its Quarterly Superannuation Performance publication and the Quarterly MySuper Statistics report for the December 2024 quarter. Key statistics for the superannuation industry as at 31 December 2024 include an 11.5% increase in total superannuation assets over the previous 12 months to $4,166.9 billion.

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ATO – Increase to transfer balance cap

On 26 February 2025, the ATO issued a media release confirming that the general transfer balance cap will be indexed on 1 July 2025. The cap will increase to $2 million in the new financial year. The ATO has also confirmed that the ‘defined benefit income cap (DBIC) will increase to $125,000 (from $118,750) for the 2025–26 income year’.

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Legislation – New family law superannuation regulations made

On 24 February 2025, the Family Law (Superannuation) Regulations 2001 (Cth) and the Family and Other Laws (Superannuation) (Repeal and Consequential Amendments) Regulations 2025 (Cth) were registered on the Federal Register of Legislation.

The first instrument largely remakes the existing regulations which were due to sunset on 1 April 2025. As referred to in our Super Alert of 15 March 2024, the Attorney-General’s Department consulted about remaking the regulations and sought to maintain the existing framework but modernise the drafting.

The Explanatory Statement indicates that the main changes relate to the Australian Government Actuary’s advice about amending the regulations to ‘support accurate valuation of a wide range of superannuation interests based on current demographic and actuarial assumptions, the accurate calculation of non-member spouse entitlements and the provision of relevant information by superannuation trustees’. Some changes have also been made to the numbering of the provisions and a table has been included in Attachment C of the Explanatory Statement which shows the differences.

The second instrument makes amendments to associated regulations (such as the SIS Regulations) to give effect to the new 2025 regulations. According to the Explanatory Statement, this instrument ‘omit[s] references to the 2001 Regulations and substitute[s] references to the 2025 Regulations in the [various] legislative instruments’.

Click here and here for details.