The Australian Prudential Regulation Authority (APRA) has issued a $1.5 million fine to OnePath Custodians (OPC) for 125 alleged breaches of the Superannuation Industry (Supervision) Act 1993 (SIS Act).
The firm, owned by Insignia Financial, reportedly failed to direct default member contributions to a MySuper product.
OnePath, which manages approximately $35 billion in funds from 700,000 members, has 28 days to pay the fine to be applied to the Commonwealth Consolidated Revenue Fund.
APRA deputy chair Margaret Cole said trustees should expect to face “severe consequences” for breaches of the SIS Act.
“It is imperative that trustees adhere to the law and direct members’ money to the correct product in a timely manner to ensure their best financial interests are protected at all times,” she said.
“APRA takes these provisions seriously and will act swiftly in deploying its enforcement toolkit where trustees fall short of our expectations.
“We expect trustees to have robust governance, compliance and risk management frameworks embedded and operationalised to prevent, detect, and swiftly remediate potential breaches of their obligations.”
Ms Cole said APRA would “closely monitor” OPC to ensure affected members are compensated for any potential losses.
OnePath Custodians has accepted fault for the infringement notices and has resolved to shore-up its processes to prevent future misdirection of member funds.
“OPC is committed to continuing to uplift its governance, compliance and risk management frameworks and is working closely with the regulator to meet its expectations,” Lindsay Smartt, chairman of OnePath Custodians, said in a statement.
OnePath is the latest superannuation trustee to face regulatory action.
Earlier this month, the Australian Securities and Investments Commission made interim stop orders on one superannuation product and three managed funds promoted by Spaceship Capital due to deficiencies in their target market determinations.
This was the first interim stop order on a superannuation product under recently introduced design and distribution obligations.
