Super Alert – 3 October 2025: APRA Annual Report, consolidation of asset test exemption instruments, draft legislation re banning adverse genetic testing results in life insurance

Welcome to the weekly KHQ Super Alert. We are back after taking a one week break due to the public holiday in Melbourne. This week there were various releases from regulators on a range of topics, consolidation of asset test exemption instruments and some draft legislation designed to ban adverse genetic testing results in life insurance.

APRA – Insights into strategic challenges for promoting member outcomes

On 2 October 2025, APRA released an insights paper in relation to the ‘challenges facing some superannuation trustees in operational efficiency, growth, and competitive positioning’. Some of the key challenges identified by APRA include the following:

• ‘continuing industry consolidation leading to the reduction in the number of funds;
• ongoing growth in the size of the superannuation system, with recent growth concentrated in the largest funds;
• expense ratios trending downwards at an aggregate level, but material difference across funds; and
• significant differences across funds in terms of natural cash flows and rollover dynamics’.

Click here for details.

APRA – Annual Report 2024-25

On 2 October 2025, APRA published its Annual Report for the 2024-25 financial year. It notes that APRA ‘ currently supervises 1,147 entities holding some $9.8 trillion in assets for Australian depositors, policyholders and superannuation fund members.’ Excluding SMSFs and exempt public sector schemes, as at 30 June 2025 APRA regulated 776 superannuation entities (including 72 public offer funds) holding just over $3 trillion.

During the year, APRA noted that its superannuation-related enforcement actions included:

• ‘imposing additional licence conditions on three superannuation trustees relating to concerns with data, fitness and propriety processes, and fund expenditure management. …
• accepting court enforceable undertakings from three regulated entities. … relating to weaknesses in its approach to nonfinancial risk management and risk culture; … relating to compliance deficiencies and compensating members for failing to invest members’ default superannuation contributions in MySuper products under the [SIS Act]; and … relating to weaknesses with its approach to operational risk management.
• issuing infringement notices to [an entity] to the value of $10.7 million for failures to invest members’ default superannuation contributions in MySuper products. …
• commencing civil penalty proceedings in the Federal Court against the former director and co-chair of [a superannuation fund trustee] relating to alleged breaches of the director covenants in the SIS Act. APRA is seeking civil penalties and disqualification…
• successfully defending a judicial review application by [a superannuation fund trustee] in the Federal Court in relation to APRA’s decisions to impose additional licence conditions and to disclose that decision.
• requiring [a superannuation fund trustee] to make payments to members impacted by weaknesses in revaluations made in March 2020.’

Click here for details.

ASIC – Findings in relation to review of RSE financial reports

On 30 September 2025, ASIC published Report 816 titled ‘Accounting for your super: ASIC’s review into the financial reporting and audit of super funds’. ASIC reviewed the 30 June 2024 financial reports prepared by 60 RSE licensees and identified that there are ‘inconsistent approaches to disclosing investments, limited disclosure of sponsorship and advertising expenses, and insufficient audit evidence obtained in the valuation of some investments’.

ASIC will continue its reviews of RSE financial reports for the next round of reporting. The regulator also proposes to ‘publish a report on auditor independence in early October, followed by its annual financial reporting and audit public report in late October’.

Click here for details.

APRA – Services reporting standard revoked

On 1 October 2025, APRA announced that it has revoked Reporting Standard SRS 331.0 Services. APRA has determined that this reporting is no longer required as trustees are now required to submit to APRA registers of material service providers under CPS 230 Operational Risk Management.

Click here for details.

ASIC – Reminder to financial advisers to update their register details

On 30 September 2025, ASIC issued a reminder to financial advisers to ‘immediately review the accuracy of their information on the Financial Advisers Register if they intend to continue providing personal advice to retail clients from 1 January 2026’. Otherwise, if the information is not updated then advisers ‘may be unable to provide advice after 31 December 2025’ as ‘[i]t is a serious offence to knowingly provide false or misleading information to ASIC or to fail to take reasonable steps to ensure the information provided is true and correct’.

Click here for details.

Legislation – Consolidation of asset test exemption instruments

On 29 September 2025, the Social Security (Asset-test Exempt Income Stream Guidelines) Determination 2025 was registered on the Federal Register of Legislation. This determination replaces the following instruments:

• Asset-test Exempt Income Stream (Lifetime Income Stream Guidelines) (Social Security) Determination 2015; and
• Social Security (Guidelines for Determining Whether Income Stream is Asset-test Exempt) Determination 2022.

According to the Explanatory Statement, certain superannuation products, such as defined benefit income streams and legacy retirement products, are exempt from being considered in the assets test for the purposes of social security payments. The new determination consolidates the 2015 and 2022 determinations referred to above and ‘introduces new guidelines…when determining [whether] certain legacy superannuation retirement products are asset-test exempt income streams’.

Click here for details.

ASIC – Announcement in relation to plans for breach reporting and dispute resolution data

On 25 September 2025, ASIC published its planned approach in relation to ‘publishing two public-facing dashboards containing Internal Dispute Resolution (IDR) and Reportable Situations (RS) data’. ASIC confirmed that it ‘has decided not to proceed with its initial proposal to publish firm-level RS data. ASIC will instead publish aggregate-level RS data’. This is because ‘ASIC sought to balance the benefits of firm-level transparency against concerns around the maturity of the RS regime’.

As referred to in our Super Alert of 11 April 2025, ASIC consulted with industry about whether it should use its legislative powers to publish licensee-level breach reporting data as it presently does not use these powers.

Click here for details.

ATO – Amendment to NALI law companion ruling

On 24 September 2025, the ATO published its amendments to Law Companion Ruling 2021/2 Non-arm’s length income – expenditure incurred under a non-arm’s length arrangement. The ATO has explained that the amendments apply retrospectively from 1 July 2018 and seek to clarify how changes made to the Income Tax Assessment Act 1997 by the Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Act 2024 impact the ruling and the ATO’s approach to compliance with the NALI rules.

Taxation Ruling 2010/1 Income tax: superannuation contributions was also amended on the same day to make similar NALI-related changes and ‘also contains changes to reflect the removal of the maximum earnings test for the purpose of deducting personal contributions, which commenced from 1 July 2017’.

Click here and here for details.

Treasury – Draft legislation to ban adverse genetic testing results in life insurance

On 24 September 2025, Treasury released draft legislation in relating to banning ‘the use of genetic test results in life insurance’. As referred to in our Super Alert of 13 September 2024, last year the Government announced its plans to prohibit the use of adverse predictive genetic test results in underwriting life insurance.

The consultation period closes on 12 October 2025.

Click here for details.

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