What is an RSE licensee and what are their responsibilities?

In Plain English

An RSE licensee is essentially the entity that holds a license to operate a superannuation fund. Think of it as the manager or trustee of your super. They can be either a company or a group of individuals.

RSE licensees have several important responsibilities, including:

• Following superannuation laws and regulations.
• Properly performing their duties as a trustee, acting in the best interests of the super fund members.
• Having an Australian Business Number (ABN).
• Ensuring the super fund is registered.
• Informing APRA (the superannuation regulator) of any significant changes, like changes in who controls the RSE licensee.
• Complying with any other conditions that are specified in the regulations.
• Having a robust governance framework, including policies for board composition, renewal, and performance assessment (Superannuation (prudential standard) determination No. 3 of 2024).
• Managing risks, including governance, investment, liquidity, operational, and insurance risks (Superannuation (prudential standard) determination No. 3 of 2019).
• Prudently managing financial resources and setting fees fairly and transparently (Superannuation (prudential standard) determination No. 5 of 2024).
• Having an insurance management framework to manage making insured benefits available to beneficiaries (Superannuation (prudential standard) determination No. 1 of 2022).

Detailed Explanation

An RSE licensee, as defined in section 10(1) of the Superannuation Industry (Supervision) Act 1993, is the entity that holds a license to operate a registrable superannuation entity (RSE). Only a body corporate or a group of individual trustees may apply for an RSE license, as noted in Chunk 39 of the Superannuation Industry (Supervision) Act 1993.

Key Responsibilities and Conditions:

• Compliance with Laws and Regulations: RSE licensees must comply with the RSE licensee law and Chapter 2M of the Corporations Act 2001, as stated in paragraph (1)(a) of Chunk 40 of the Superannuation Industry (Supervision) Act 1993.
• Proper Performance of Trustee Duties: The duties of a trustee must be properly performed by the RSE licensee, whether it is a body corporate or a group of individual trustees, as per paragraph (1)(b) of Chunk 40 of the Superannuation Industry (Supervision) Act 1993.
• ABN Requirement: RSE licensees must have an ABN or have applied for one, as per paragraph (1)(ba) of Chunk 40 of the Superannuation Industry (Supervision) Act 1993. They must also ensure their ABN is included on documents given to APRA and other relevant documents, according to section 29DC of the Superannuation Industry (Supervision) Act 1993.
• RSE Registration: RSE licensees must ensure that each RSE they manage is registered or is the subject of a pending registration application, as per paragraph (1)(d) of Chunk 40 of the Superannuation Industry (Supervision) Act 1993.
• Notification of Changes: RSE licensees must notify APRA of any change in the composition or control of the RSE licensee within 14 days after the change, as required by paragraph (1)(f) of Chunk 40 of the Superannuation Industry (Supervision) Act 1993. This includes changes in directors or a person's stake in the RSE licensee if it is a body corporate, or changes in the members of the group if it is a group of individual trustees, as detailed in subsection (2) of Chunk 40 of the Superannuation Industry (Supervision) Act 1993.
• Compliance with Prudential Standards: RSE licensees must comply with prudential standards set by APRA, such as those related to governance, risk management, and insurance management. Failure to comply with these standards can lead to APRA directions or license cancellation, as indicated in Note 1 of Chunk 40 of the Superannuation Industry (Supervision) Act 1993.
• Annual Members' Meeting: RSE licensees must hold an annual members' meeting, providing members with opportunities to ask questions about the RSE, the licensee, and related matters, as outlined in section 29P of the Superannuation Industry (Supervision) Act 1993.
• Risk Management: RSE licensees must have a risk management framework that covers all material risks, both financial and non-financial, to the RSE licensee’s business operations (Superannuation (prudential standard) determination No. 3 of 2019).
• Financial Resource Management: RSE licensees must have a robust approach to the management of financial resources, setting fees prudently and transparently, and managing reserves appropriately (Superannuation (prudential standard) determination No. 5 of 2024).
• Insurance Management: RSE licensees must have an insurance management framework to manage making insured benefits available to beneficiaries (Superannuation (prudential standard) determination No. 1 of 2022).

APRA has the power to direct a person who is in control of an RSE licensee to relinquish that control if there has been, is or is likely to be interference with the ability of the RSE licensee to satisfy its obligations in relation to a superannuation entity (Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019).