Super Alert – 29 May 2026: APRA speech on challenges of TPD insurance, quarterly statistics, FC approves class action settlement

Welcome to the weekly KHQ Super Alert. This week, APRA published a speech on the challenges of TPD insurance, released its quarterly statistics and sought feedback on levies for the 2026-27 financial year. The ATO sought feedback on a practice statement for considering extensions to mandatory contribution periods under the Payday Super reforms. Meanwhile, the Federal Court approved a class action settlement as fair and reasonable.

 APRA – Quarterly superannuation statistics released

On 28 May 2026, APRA released the latest superannuation statistics for the quarter ending 31 March 2026. Total superannuation assets decreased by 1% to almost $4.4 trillion over the quarter, however those assets increased 7.9% compared to the same period last year. There was a significant 19.1% increase in member contributions over the year.

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ATO – Practice Statement published for consultation

On 27 May 2026, the ATO published Practice Statement Law Administration 2026/D3 relating to the ‘Payday Super’ reforms to the Superannuation Guarantee framework. The Practice Statement provides guidance on what must be considered when the Commissioner determines, in response to exceptional circumstances, that a longer period of time is permitted for contributions to be received by an employee’s superannuation fund.

The two categories of exceptional circumstances under which the Commissioner can make a determination are:

• in the event of natural disasters; or
• widespread outages of information and communication technology systems, or other technology services or platforms that facilitate or support employers making contributions.

The Practice Statement highlights the need for the Commissioner to balance competing considerations, including those relating to:

• the nature of the exceptional circumstances;
• the extent and significance of the circumstances;
• employee interest considerations; and
• the proportionality and appropriateness of making a determination.

The consultation period closes on 26 June 2026.

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APRA – Executive Director’s speech on TPD sustainability published

On 27 May 2026, APRA published a speech given by Executive Director, Jane Magill. The speech highlighted some of the issues and the recent work undertaken with respect to TPD insurance, and specifically focused on ensuring the future sustainability of TPD insurance.

Key points from the speech included:

• superannuation funds play a critical role in addressing the sustainability challenge for TPD insurance, as they ultimately own the product design in their group insurance products;
• ‘the current form of TPD insurance is being tested by a sharp rise in mental health claims’ which now account for one in three claims paid;
• APRA expects claims functions to be adequately resourced in both capacity and capability; and
• the use of the labels ‘TPD’ and ‘lump sum benefits’ does not always deliver good outcomes for individuals, especially where claimants have episodic conditions.

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APRA – Feedback sought on proposed supervisory levies for 2026-27

On 25 May 2026, APRA published a discussion paper titled ‘Proposed Financial Institutions Supervisory Levies for 2026-27’ seeking industry views on the proposed Financial Institutions Supervisory Levies for the 2026-27 financial year.

The proposed levies relate to APRA, the ATO, the Gateway Network Governance Body, and the Treasury superannuation consumer advocate. The paper proposes a 5.2% increase to the total levies required compared to the 2025-26 budget. The consultation period closes on 14 June 2026.

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Federal Court – Class action settlement approved

 On 21 May 2026, the Federal Court published its decision in Challenor v QSuper Board [2026] FCA 617, a representative proceeding under the Federal Court of Australia Act 1976 (Cth), brought on behalf of superannuation fund members who were impacted by changes made to insurance terms by the defendant.

The changes to the insurance terms under the fund’s group insurance policy resulted in certain members being charged occupationally rated premiums despite not making an an election to have their insurance premiums occupationally rated, resulting in them paying higher premiums. The matter was initially set for trial in December 2025 but settled in September 2025 for $67 million. It was this settlement that was considered by the Court.

The Court determined:

• that the settlement sum was fair and reasonable after considering the risks of proceeding and potential difficulties in proving damages in a misleading conduct case;
• that the structure of the settlement distribution scheme was fair;
• to approve deductions for legal and settlement administration costs with minor reimbursement payments to the plaintiff and a sample group member; and
• that selective suppression and non-publication orders were appropriate for certain confidential materials.

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