Draft Prude ntial Standards Andr e w Boal, Chair of the ac tic e Committe e Supe r annuation Pr
De fine d Be ne fit Matte rs (SPS 160) • Must se t a sho rtfa ll limit b a se d o n ve ste d b e ne fits • E xpe c te d to b e a d d re sse d within 1 ye a r - o r ne xt va lua tio n if so o ne r • Witho ut ne e d fo r imme d ia te a c tio n (o the rwise “inte rim” va lua tio n, re po rt within 3 mo nths, a sse ts vs sho rtfa ll limit, re c o mme nd e d a c tio ns/ c o ntrib utio ns within 15 d a ys) • APRA c a n d ire c t lic e nse e to a ppo int a n a c tua ry o r c o nd uc t va lua tio n o r re q ue st re po rt • 6 mo nth time fra me fo r re g ula r va lua tio ns • ORF R e xc lud e d fro m a sse ts • 3 ye a rs pro je c tio ns o n re a so na b le e xpe c ta tio ns
De fine d Be ne fit Matte rs (SPS 160) • If unsa tisfa c to ry (o r a b o ut to b e c o me – 3 ye a rs? ): • Ac tua ry must pre pa re a sta te me nt to lic e nse e within 15 b usine ss da ys with re c o mme nde d a c tio ns/ c o ntrib utio ns • Re sto re sa tisfa c to ry po sitio n within “re a so na b le ” time fra me (3 ye a rs ma ximum) • L ic e nse e must se t o ut re sto ra tio n pla n within 3 mo nths • Inc luding like liho o d tha t c o ntrib utio ns will b e pa id • Pro vide c o py to APRA within 15 b usine ss da ys • Ac tua ria l ma na g e me nt if sho rtfa ll limit b re a c he d • APRA ma y re q uire re g ula r re po rts, re vie w inve stme nt stra te g y o r va ry the pe rio d o f the re sto ra tio n pla n
De fine d Be ne fit Matte rs (SPS 160) Se lf insura nc e : • Annua l a tte sta tio n tha t se lf insura nc e is in me mb e rs b e st inte re st • Ac tua ria l a sse ssme nt o f a de q ua c y o f re se rve a t le a st e ve ry thre e ye a rs • De ve lo p a c o nting e nc y pla n
Insuranc e in Supe r (SPS 250) Re q uire me nts: • Ne e d to ha ve “insura nc e ma na g e me nt fra me wo rk” • Co sts/ pre miums, und e rwriting , c la ims • Re vie w pro c e ss • F o rmula te a nd g ive e ffe c t to se le c tio n pro c e ss • Due d ilig e nc e o f se le c te d insure rs • Insura nc e po lic ie s to me e t minimum sta nd a rd s • Rule s fo r mo nito ring insura nc e re la tio nships • T ra nsitio n fo r “no n pe rmitte d ” insura nc e pro d uc ts
F it and Prope r (SPS 520) Re spo nsib le pe rso ns: • Inc lude s a d ire c to r, se nio r ma na g e r a nd se c re ta ry, plus the a ppro ve d a ud ito r a nd the a c tua ry • Crite ria fo r the a c tua ry inc lud e s: • Co mpe te nc e , c ha ra c te r, d ilig e nc e , e xpe rie nc e , ho ne sty, inte g rity a nd jud g e me nt – a ll o the r c rite ria • Appro pria te fo rma l q ua lific a tio ns (F IAA o r Ac c re d ite d ) • Minimum five ye a rs re le va nt e xpe rie nc e in supe r • No c o nflic t o f inte re st, o r the c o nflic t will no t c re a te a ma te ria l risk tha t the pe rso n will fa il to pe rfo rm pro pe rly the ir d utie s o f the po sitio n
Conflic ts of Inte re st (SPS 521) Re q uire me nts fo r the a c tua ry: • Id e ntify a ll po te ntia l c o nflic ts • Circ umsta nc e s tha t mig ht g ive rise to a c o nflic t • Und e rsta nd the c o nflic t ma na g e me nt fra me wo rk • Ob lig a tio ns to the truste e b o a rd • Disc lo se a ll re le va nt dutie s a nd re le va nt inte re sts, a nd • K e e p the info rma tio n up-to -da te • T ruste e Bo a rd must: • Avo id c o nflic ts whe re re q uire d, o r • Ma na g e c o nflic ts to g ive prio rity to b e ne fic ia rie s
Risk Manage me nt (SPS220) & ORF R (SPS114) & more • Risk Ma na g e me nt F ra me wo rk • Co ve ring a ll ma te ria l risks, risk a ppe tite , risk to le ra nc e • Ope ra tio na l Risk F ina nc ia l Re q uire me nt (ORF R) • T a rg e t le ve l a nd to le ra nc e limit • Pro c e ss is impo rta nt (pro je c tio ns & stre ss te sting ) • Re ple nishme nt pla n o ve r re a so na b le pe rio d • Audit a de q ua c y a nd e ffe c tive ne ss (e xte rna l e xpe rt) • Inve stme nt Go ve rna nc e F ra me wo rk • Co mpre he nsive stre ss te sting inc luding liq uidity • 22 + fra me wo rks, pla ns, po lic ie s, pro c e dure s, stra te g ie s, c ha rte rs, de le g a tio ns, a ppo intme nts …
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