HESTA apologises over regulatory concerns
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More news: HESTA has publicly apologised to its members after the Australian Prudential Regulation Authority (APRA) imposed additional licence conditions on the superannuation fund, following concerns over its transition to a new administration provider.
What they said: "We take the matters raised by APRA very seriously and are cooperating fully with the regulator to resolve them", said HESTA CEO Debby Blakey. "We apologise to members who experienced delays during our transition to a new administration provider.
"The change to a new administration platform in June was made with a long-term focus on delivering better, more personalised service to our members.
"Since the transition we have worked closely with our administration provider to seek to deliver the level of service our members expect and deserve. We are committed to implementing any potential improvements identified so we can better support our members now and into the future."
APRA imposes additional licence conditions on HESTA
The news: The Australian Prudential Regulation Authority (APRA) has imposed additional licence conditions on HESTA to address concerns regarding the superannuation fund's risk management and board governance during its recent transition of outsourced administration providers.
The numbers: HESTA is one of the country's largest super funds with 1.1 million members and around $100 billion in funds under management.
The context: APRA said the new conditions follow the transition of HESTA’s administrative services to a new provider, finalised in June, which resulted in a prolonged disruption to member services and caused "direct harm to members".
The regulator has identified deficiencies in HESTA’s board governance and management of risks which rendered the super fund "inadequately prepared to effectively oversee and manage the transition".
Under APRA's conditions, HESTA is required to conduct separate independent reviews of its risk management framework and board effectiveness.
What they said: “APRA expects trustees to demonstrate strong governance and risk management in their oversight of critical operations and material service providers," said APRA deputy chair Margaret Cole.
"That responsibility is further heightened when a service that is critical to members' is at risk.
“While some disruption is unavoidable when changing service providers, APRA expects that any transitions are well managed and do not result in any unnecessary impact on members ability to access their accounts.
"APRA’s imposition of licence conditions means that HESTA is required to take prompt action to address deficiencies. APRA will utilise its powers to hold trustees accountable to meet their obligations to members."
The source: APRA media release
