APRA applies additional licence conditions on Mercer Super
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The news: The Australian Prudential Regulation Authority (APRA) has imposed additional licence conditions on Mercer Super to ensure it addresses risk management and compliance management deficiencies.
The numbers: Mercer Super is the trustee of Mercer Super Trust and Mercer Portfolio Service Superannuation Plan, which have approximately 850,000 members and over $70 billion in funds under management.
In April 2023 it acquired BT Super from Westpac.
The context: APRA previously identified Mercer's risk management and compliance management deficiencies as part of its ongoing prudential supervision of the trustee, which included a prudential review conducted in October 2023. Mercer has subsequently acknowledged significant breaches of prudential standards.
Under the terms of the new licence conditions, which came into force on Monday, Mercer must develop and implement a remediation plan in conjunction with an independent expert that addresses the deficiencies identified by APRA.
It must also appoint an independent third party to complete an operational effectiveness review of Mercer’s risk management and compliance frameworks, and develop a plan to remedy any deficiencies identified in the operational effectiveness review.
What they said: APRA deputy chair Margaret Cole said: “We have applied these conditions to drive substantial governance and risk management improvements at Mercer Super and protect the interests of its members".
"Mercer Super has experienced significant growth in recent years, in terms of membership size and assets," she said.
"It is important that, when preparing to scale up operations, the trustee has the appropriate level of controls in place to ensure frameworks and systems continue to serve the needs of current and future fund members."
The source: APRA media release
