Super Alert – 7 March: Changes to governance standards proposed, ASIC enforcement update

Welcome to the weekly KHQ Super Alert. This week APRA announced significant proposed changes to prudential standards dealing with governance matters. Further legislative instruments were registered prescribing family law and income stream valuations. ASIC also released its latest enforcement report.

APRA – Changes to governance standards proposed

On 6 March 2025, APRA released a discussion paper seeking input in relation to ‘proposals to strengthen its prudential governance framework for banks, insurers and superannuation trustees’. APRA is seeking to continue consultations throughout this year and next before the updated prudential standards and guidance are launched in 2027.

The key proposals would require superannuation trustees to:

• ‘impose a lifetime default tenure limit of 10 years for non-executive directors at a regulated entity’;
• ‘meet higher minimum requirements to ensure fitness and propriety of their responsible persons’;
• ‘commission a qualified independent third-party performance assessment at least every three years which covers the board, committees and individual directors’ if they are significant financial institutions;
• ‘identify and document the skills and capabilities necessary for the board overall, and for each individual director’;
• ‘evaluate existing skills and capabilities of boards and individual directors’;
• ‘take active steps to address gaps through professional development, succession planning and appointments’; and
• ‘have separate risk and audit committees’.

Click here for details.

Legislation – Further family law instrument registered

On 5 March 2025, the Family Law (Superannuation) (Methods and Factors for Valuing Particular Superannuation Interests) Approval 2025 (Cth) was registered on the Federal Register of Legislation. As explained in our Super Alert of 28 February 2025, the primary regulations were replaced last month. Accordingly, this instrument was also required to be replaced.

The primary regulations specify various methods and factors for determining the gross value of a superannuation interests for the purposes of family law proceedings. The standard methods and factors are not appropriate for every interest, so the Attorney-General is authorised to prescribe special methods and factors for particular superannuation plans. The Explanatory Statement states that the new instrument ‘preserves the methods and factors in the 2003 Approval Instrument in its entirety, and sets out a framework for the approval of ‘transition factors’, in these superannuation plans to ensure the approved methods and factors continue to operate effectively’.

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ASIC – Latest enforcement and regulatory update

On 28 February 2025, ASIC released its enforcement and regulatory update for the period July to December 2024. The various greenwashing-related judgments were summarised and ASIC reiterated its enforcement priorities for 2025. These are:

• ‘Misconduct exploiting superannuation savings’;
• ‘Licensee failures to have adequate cyber-security protections’;
• ‘Greenwashing and misleading conduct involving ESG claims’; and
• ‘Member services failures in the superannuation sector’.

Click here for details.

Legislation – New instrument registered prescribing life tables to be used for income stream calculations

On 24 February 2025, the Social Security (Value of Asset-tested Income Streams (Lifetime)) Amendment Determination 2025 (Cth) was registered on the Federal Register of Legislation. The Explanatory Statement explains that the purpose of the instrument is to amend ‘the Social Security (Value of Asset-tested Income Streams (Lifetime)) Determination 2019…to amend the definition of ‘Life Tables’ in section 4…[in order to] ensure that the latest Australian Life Tables published by the Australian Government Actuary are used from 1 January 2025, when determining the surrender value and death benefit value of a person’s asset-tested income stream (lifetime)’.

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