Our pre-election wrap of super regulatory reforms for 2022

By Geoff Sanders, Stephanie Malon, Ashlee Johnson
APRA Financial Services Private Capital Superannuation

Another year, another batch of changes for super trustees 17 min read

Coming off a busy 18 months or so – with the number of reforms too long to count on all fingers and toes – superannuation trustees could be forgiven for wanting to take an extended holiday from regulatory change. But with Parliament prorogued ahead of the election, now is a chance for trustees to take stock of the regulatory reforms slated for 2022.  

In this Insight, we provide a snapshot of the key reforms.

Key takeaways 

Trustees will be kept busy with a range of sector-specific reforms, such as:
  • complying with the new retirement income covenants;
  • maintenance and refinement of their approach for portfolio holdings disclosure following the first disclosure date;
  • continued refinement in the strategic planning and member outcomes space, including the expansion of the performance test to choice and trustee-directed products; and
  • bolstering contingency and recovery planning, to ensure financial resilience.
Trustees will also need to keep on top of recent and proposed reforms relevant to the broader financial services industry – to name just a few:
  • the financial accountability regime;
  • the remuneration framework requirements under Prudential Standard CPS 511;
  • the updated protections for critical infrastructure;
  • the new fees and costs requirements under Regulatory Guide 97 for all product disclosure statements issued on or after 30 September 2022;
  • the expansion of the unfair contract terms regime;
  • other APRA initiatives under its policy and supervision priorities, driven by a theme of 'protected today' and 'prepared for tomorrow'; and
  • the raft of sanctions being issued in relation to the crisis in Ukraine.

Snapshot of key reforms

Retirement income covenants

The long-promised retirement income covenants were finally passed into law on 10 February 2022. They are aimed at improving retirement outcomes, including by moving retirees away from a 'nest egg' mentality towards spending more in retirement. Trustees will be required to publish their first strategy by 1 July 2022, so should be preparing it now.

We provide a brief overview of the new trustee covenants below – for more details, see our previous Insights here and here. APRA has said that it plans to support the implementation of the changes with 'appropriate amendments to the prudential framework' in 2022.



 Key dates

Retirement income strategy

Trustees are required to formulate, review regularly and give effect to a strategy that addresses how they will assist beneficiaries who are 'retired or approaching retirement' to achieve and balance three objectives:

  • to maximise expected retirement income over the 'period of retirement';
  • to manage expected risks to the sustainability of 'retirement income' of the 'period of retirement'; and
  • to have flexible access to expected funds over the 'period of retirement'.

In developing the strategy, trustees must be mindful of the section 52AA requirements.

1 July 2022

Reasonable steps to gather information

Trustees must take reasonable steps to gather information that is necessary to inform their strategy. In an echo of their design and distribution obligations, they will be expected to actively engage with the needs and objectives of fund members in formulating the strategy.

Publish strategy in writing

Trustees must record the strategy in writing. A summary of the strategy must be made publicly available by 1 July 2022.

Record certain matters

Following the theme of enhanced documentation requirements under Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515) and the best financial interests duty, trustees must document determinations and significant decisions made in developing the strategy.

Portfolio holdings disclosure

Superannuation trustees were required to disclose their portfolio holdings on their websites for the first time this March (with reports to provide a snapshot as at 31 December and 30 June – and be up on the website within 90 days of those dates).

The portfolio holdings disclosure regulations made in November 2021 provided trustees with the long-awaited detail on the manner in which that information needs to be disclosed. Now that the first disclosure date has passed, we expect superannuation trustees and external managers will have a number of learnings that could be used to refine their approach leading up to the next disclosure date. See our previous Insight for more details.

Fees and costs disclosure

While the new fees and costs regime (introduced by ASIC Corporations (Disclosure of Fees and Costs) Instrument 2019/1070 and the new version of ASIC Regulatory Guide 97) is already mandatory for periodic statements, the deadline for PDS compliance is fast approaching. From 30 September, all PDSs given must be compliant with the new RG 97 requirements.

The regime presents a number of challenges for superannuation trustees, both around the form of disclosure and the treatment of various investment structures and costs. Trustees, administrators and fund managers are all grappling with some tricky questions – despite best efforts to clarify the regime, there are still many aspects that are difficult to interpret and apply. See here for more details.

Performance test, heatmap and member outcomes

In 2021, APRA published its inaugural performance test findings for MySuper products. For the 13 products that failed the 2021 test, trustees will be busy grappling with the consequences – particularly for products that look like they may fail a second time in 2022 (which will mean new interests can't be issued in those products).

This year will also see the performance test extended to all trustee-directed products for the first time – and there'll be some important questions to deal with around how it will apply to those products. Trustees can expect reporting on asset allocations to attract particular scrutiny over the next performance test period. APRA has stated that monitoring and enforcing compliance with accurate disclosure of data relating to products and investment options (data that forms the foundation for the performance test) is a supervision priority for the coming year.

In December 2021, on a similar theme, the regulator published an updated Heatmap, which represents an extension of the regime beyond the original MySuper scope for the first time. The Choice Heatmap focuses on a select segment of the sector: specifically, multi-sector investment options. APRA intends to expand the scope of the Choice Heatmap to include broader segments in future years.

Finally, APRA has flagged that it intends to review SPS 515 and associated guidance over the course of 2022, with a view to finalising the standard in 2023. It is unclear when the updated standard and guidance will become effective; however, in line with its recent efforts, we expect that this will be a priority for APRA.

Contingency and recovery planning

APRA has flagged a number of reforms to 'promote system stability and ensure entities maintain financial and operational resilience'. In November 2021, it issued a discussion paper on 'Strengthening financial resilience in superannuation' – with the results intended to inform enhancements of the prudential framework. This includes financial resilience in the event that the trustee incurs a penalty, having regard to the new prohibitions on indemnification out of trust assets under sections 56 and 57 of the Superannuation Industry (Supervision) Act 1993 (Cth) that came into effect on 1 January 2022. Submissions on the discussion paper were due 11 March 2022.

The following prudential standards have also been flagged:



Key dates

Prudential Standard CPS 900 Resolution Planning.

Prudential Standard CPS 190 Financial Contingency Planning

APRA released these draft standards, which are aimed at ensuring entities are ready for crisis management and to respond to scenarios that may threaten their financial viability, in 2021. It is aiming to finalise both the standards and related guidance this year.

Expected to commence in 2024. Additional one-year transition period for registrable superannuation entity (RSE) licensees to meet CPS 190.

Prudential Standard CPS 230 Operational Risk Management

This year, APRA will consult on a new Prudential Standard CPS 230 with enhanced requirements for operational risk management. These will update and replace existing requirements in Prudential Standard CPS 231 Outsourcing and Prudential Standard CPS 232 Business Continuity Management, and equivalent superannuation standards.

APRA intends for the new CPS 230 to facilitate sound operational risk controls and ensure continuity of key services through periods of disruption.

Expected to commence in 2024.

Prudential Standard SPS 530 Investment Governance

Following the difficulties faced by industry through the Covid-19 pandemic, APRA will update SPS 530 to enhance its guidance on prudent valuation practices, stress testing and liquidity management. See our previous Insight for more details.

Expected on 1 Jan

Climate change financial risks

In November 2021, APRA released CPG 229 Climate Change Financial Risks (CPG 229), which sets out its expectations of how regulated institutions should be approaching climate change risks. While CPG 229 is non-binding, in light of the new portfolio holdings disclosure regime where granular detail of investment selections is available to industry and the public more broadly, trustees would be wise to heed the guidance, and take steps to ensure their investment strategies align with their public policies on climate change risk management. See our previous Insight for further details.

In its policy and supervision priorities for 2022, APRA indicated that it will publish additional tools to assist regulated entities with evaluating climate-related financial risks, and increase its scrutiny of how regulated entities are addressing the impact of climate risk. It will also require cross-industry participants to complete an entity-level self-assessment survey on management of climate risk, to improve APRA's understanding of the alignment between management of climate-related financial risks, CPG 229 guidance, and the recommendations of the Task Force on Climate-related Financial Disclosures.

Cyber evolution

APRA has indicated in its policy priorities that it will take steps to modernise the prudential architecture, in response to the rapid digital evolution of the financial system. Its initiatives will be multi-phased, with the 2022 phase focused on progressing initial steps and scoping the longer-term path.

There are a range of specific measures recently introduced or mooted in the technology and data space. We have set out some key developments below.



Key dates

National Critical Infrastructure

The Security of Critical Infrastructure Act 2018 (Cth) (SOCI Act) has been amended recently and introduces the following key changes:

  • The scope of 'critical infrastructure sectors', 'critical infrastructure assets' and the relevant entities which are captured by the SOCI Act has been broadened, resulting in more entities being required to register the details of their critical assets with the Cyber and Infrastructure Centre and more transactions being subject to FIRB approval.
  • Importantly, for superannuation trustees, an asset which is a 'critical superannuation asset' will be captured as a class of 'critical infrastructure asset' under the SOCI Act. An asset is a critical superannuation asset if:
    • it is owned or operated by an RSE licensee that is critical to the security and reliability of the financial services and markets sector, being an entity that holds assets over $20 billion; and
    • it is used in connection with the operation of a superannuation fund.
  • The SOCI Act establishes registration obligations, cyber security incident notification obligations and has granted the Government with 'last resort' powers, which allows the Government to require all relevant entities for critical infrastructure sector assets to provide information or undertake an action as directed, and authorises the Australian Signals Directorate to intervene against cyber security incidents in certain circumstances.
  • The Minister may also declare the most critical assets, which have significant interdependencies with other assets across the economy as 'systems of national significance', such systems may have additional obligations imposed on them.

These changes will be significant for superannuation trustees, who are affected as part of the financial services and markets sector and are likely captured as either a relevant entity for this sector or an entity that is responsible for a critical superannuation asset. Trustees may also be impacted as investors in businesses that hold critical infrastructure assets of other sectors captured by the regime. See here for more details.

Effective 3 December 2021

Consumer data rights

On 12 November 2021, changes were made to the Competition and Consumer (Consumer Data Right) Rules 2020 (the Rules) under the Competition and Consumer (Consumer Data Right) Amendment Rules (No. 2) 2021. The Consumer Data Right is expected to eventually apply to the superannuation sector, but no timelines have been announced.

Effective 13 November 2021

Suptech and regtech

APRA intends to engage with an advisory panel of experts and industry stakeholders on how to make the prudential framework more agile and responsive to industry change. It will also explore avenues to integrate suptech and regtech solutions to enhance the prudential regulation framework.


Digital assets

APRA has expressed an intention to regulate new players and emerging business models that are not adequately addressed in the current framework (including crypto-assets).


Cyber resilience

APRA will continue the independent assessments of regulated entities' Prudential Standard CPS 234 Information Security compliance. It intends to share findings from the assessments, and data collected, with industry players, to promote stronger cyber practices.

APRA has also said it wants to facilitate cyber information sharing and collaboration opportunities with the assistance of government agencies and industry players, to improve situational awareness of the risks facing the industry.


Financial Accountability Regime

The long-awaited Financial Accountability Regime Bill 2021 (Cth) and the Financial Sector Reform (Hayne Royal Commission Response No 3) Bill 2021 (Cth) (the FAR Regime) were introduced to the House of Representatives on 28 October 2021. The expected commencement date for RSE licensees is 18 months after the commencement of the legislation. Ahead of the commencement of the FAR Regime, RSE licensees and other regulated entities will need to focus on how to:

  • map accountabilities across their organisations to individual accountable persons;
  • clarify governance structures to align with the new accountability framework; and
  • in the case of 'enhanced' compliance firms, record these accountabilities on paper.

For more details on the FAR regime, see our Insight.


In August 2021, APRA published Prudential Standard CPS 511 Remuneration (CPS 511). Under CPS 511, from 1 January 2023 certain APRA-regulated entities are required to maintain a remuneration framework that 'promotes effective management of financial and non-financial risks', and ensures that remuneration is 'commensurate with performance and risk outcomes'. RSE licenses that are 'significant financial institutions' (SFIs) must comply with CPS 511 requirements by 1 July 2023, whereas RSE licensees that are non-SFIs must comply by 1 January 2024.

In its policy and supervision priorities for 2022, APRA indicated that it intends to review the implementation of CPS 511 using a subset of entities across industry, and conduct a consultation on proposed new reporting and disclosure requirements to support CPS 511.

See here and here for further details.

Unfair contract terms

Major reforms are proposed to the unfair contracts regime under the Treasury Laws Amendment (Enhancing Tax Integrity and Supporting Business Investment) Bill 2022 (Cth) (the Bill) which was introduced to Parliament on 9 February 2022. The Bill, among other things, seeks to expand the reach of the unfair contract terms regime to a broader class of contracts and to impose pecuniary penalties for a breach of the regime.

The Bill is not expected to commence until 12 months after it receives Royal Assent. However, trustees should be keeping a close eye on its progress, to understand its implications.


On 1 September 2022, the so-called 'Phase VI RSE Licensees' will be required to begin posting and collecting initial margin. This is the last phase-in date after two extensions over the past three years for entities with non-centrally cleared derivative notional amounts exceeding A$12 billion during the relevant qualifying period. The requirements to comply with the initial margining rules contained in APRA's Prudential Standard CPS 226 'Margining and risk mitigation for non-centrally cleared derivatives' (CPS 226) are document heavy and complex.



Key dates

Requirement to post and collect initial margin

An RSE licensee whose aggregate month-end average notional amount of non-centrally cleared derivatives during March, April and May 2022 exceeds A$12 billion must post and collect initial margin for any new non-centrally cleared derivatives from 1 September 2022

1 September 2022

The deadline for responses to Consultation Paper 334 (CP 334) was 15 March 2021. CP 334 proposed a number of amendments to the ASIC Derivative Transaction Rules (Reporting) 2013 (the Rules), which requires entities that enter into over-the-counter derivatives to report certain information to licensed and prescribed repositories. Much of CP 334 deals with aligning technical information to international standards but, relevantly for RSE licensees, CP 334 also contemplates a revamping, or even removal, of the delegated reporting safe harbour. In our experience, this safe harbour has been relied upon by many market participants, by appointing custodians or investment managers to perform the reporting on their behalf, so removal may require substantial rethinking of how participants comply with their obligations under the Rules. The timing for ASIC's second consultation paper has passed (it was scheduled for 30 April 2021), but we anticipate that it will likely be released during the first half of 2022.

Internal dispute resolution

On 5 October 2021, ASIC Regulatory Guide 271 'Internal dispute resolution' (RG 271) replaced Regulatory Guide 165 'Licensing: Internal and external dispute resolution' (RG 165) for complaints received after the commencement date. RG 165 will continue to apply to complaints received before 5 October 2021 and will be withdrawn on 5 October 2022. While the new RG 271 has been in force for some time, trustees will need to ensure their processes are meeting the new timeframes and response requirements are met. See our Insight for more details.

ALRC Report

On 30 November 2021, the ALRC 'Financial Services Legislation: Interim Report A) was tabled in Parliament. This signalled the start of a process that may lead to significant rewrites of financial services regulation and Chapter 7 of the Corporations Act 2001 (Cth). Submissions on the report were due 25 February 2022.

Proxy advice

The Federal Government registered the Treasury Laws Amendment (Greater Transparency of Proxy Advice) Regulations 2021 (Cth) (the Regulations) on 17 December 2021. The reforms sought to impose licensing, disclosure and independence requirements on providers of proxy advice. They also sought to require superannuation trustees to provide enhanced disclosure around the exercise of their voting rights.

However, just three days after the licensing provisions took effect, the Senate disallowed the Regulations. It remains to be seen whether any part of them will be pursued in another form.

Corporate collective investment vehicles

On 10 February 2022, the Corporate Collective Investment Framework and Other Measures Act 2022 (Cth) was passed into law, nearly five years after the Federal Government first released the exposure draft legislation. While the CCIV regime will not directly impact superannuation funds, trustees and investment managers may need to engage with its implications and limitations when assessing new investment opportunities. We have explored the scope and implications of the CCIV regime in depth in our Insight.

Below are outlined the key changes introduced by the regime.



Key dates

New type of company

The regime introduces a new type of company limited by shares: the CCIV. The CCIV will be a single legal entity and must have at least one sub-fund. Sub-funds will not have separate legal personalities, but each sub-fund's assets and liabilities will be segregated from the assets and liabilities of other sub-funds.

1 July 2022

Tax treatment

The tax rules create a 'statutory fiction' so that each sub-fund of a CCIV is deemed, for tax purposes, to be a separate unit trust – the CCIV is (notionally) the trustee of the sub-fund, and investors in the CCIV that hold shares referrable to the sub-fund are the beneficiaries under the trust. Generally speaking, investors should be taxed on an attribution 'flow through' basis for income derived by a qualifying sub-fund of a CCIV.

No transitional regime

The regime doesn't include a transitional regime that would allow existing funds tax roll-over relief to restructure into a CCIV. Nor, at this stage, have there have been any announced developments by the states or territories in relation to the availability of stamp duty relief (and whether the statutory fiction created for tax purposes would be respected for stamp duty purposes). The absence of tax and duty relief is likely to be prohibitive for many existing funds wishing to restructure into a CCIV model.


There continue to be developments in the world of FIRB. On 3 December 2021, amendments to the Security of Critical Infrastructure Act 2018 (Cth) (SOCI Act) came into force, shortly followed by further amendments effective 1 April 2022.

The amendments have expanded the definition of 'critical infrastructure asset' to include, among other things, a 'critical superannuation asset'. This has resulted in a new requirement under the national security business rules in the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA) for foreign persons to obtain FIRB approval in order to (in general terms):

  • acquire a 10% or greater interest in an RSE licensee of the type described above; or
  • become an RSE licensee of the type described above.

Superannuation trustees who are indirectly impacted by FIRB (eg where they invest alongside foreign persons) will need to keep abreast of any further changes. For more details, see here, and our overview here.

Director identification number

The director identification number (DIN) initiative commenced on 1 November 2021. When a director must apply for a DIN depends on when they were appointed as a director. From 5 April 2022, superannuation trustees should ensure that directors are aware of the deadline that applies to them and amend their director on-boarding process, so that a DIN is applied for before a director is appointed. See here for more details.

Electronic signing

On 10 February 2022, the Senate passed the Corporations Amendments (Meetings and Documents) Bill 2021 (Cth), which makes permanent reforms to electronic execution under ss126 and 127 of the Corporations Act, and also to hybrid and virtual meetings. This was welcome news to industry players; however, there are a number of issues that remain outstanding, which we have explored in detail here.

Next steps

If you have questions about the issues raised in this Insight, please contact any of the people below.