APRA fines OnePath Custodians for failing to direct member contributions to a MySuper Product

The Australian Prudential Regulation Authority (APRA) has imposed a fine of almost $1.5 million dollars on OnePath Custodians Pty Limited (OPC) for failing to direct member contributions to a MySuper product.

OPC is one of four superannuation trustees owned by Insignia Financial Ltd (formerly IOOF Holdings Limited) and has approximately 700,000 members and $35 billion in funds under management.

Under the Superannuation Industry (Supervision) Act 1993 (SIS Act), trustees must direct member contributions to a MySuper product when the member has not advised the trustee where they would like their money invested. 

APRA issued infringement notices for fines imposing a cumulative penalty of $1,464,350 after becoming aware that OPC failed to direct 125 default member contributions to a MySuper product from mid-2022 onwards. The trustee cannot use members’ money to pay the fine.

APRA Deputy Chair Margaret Cole said trustees that breached their obligations under the SIS Act should expect to face severe consequences.

“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. 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.

“In addition to today’s enforcement action, APRA is closely monitoring OPC to ensure any members who suffered financial losses as a result of these breaches are fully compensated as soon as possible,” Ms Cole said.

OPC now has 28 days to pay the fine, with the penalty sum applied to the Commonwealth Consolidated Revenue Fund.