Navigating the updated SPS 515: Elevating member outcomes beyond compliance

As of 1 July 2025, APRA’s revised Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515) will further transform the landscape for superannuation trustees. This update not only reinforces compliance but also elevates the strategic imperative to prioritise member outcomes in every decision.

With the introduction of SPS 515 on 1 January 2020, APRA required superannuation trustees to embed member outcomes requirements as a core part of their strategic planning and decision-making processes. However, many trustees still view these requirements as a compliance function. The updated SPS 515 enhances the intersection of compliance and strategy. APRA describes the updates as setting a clear expectation for trustees to prioritise members’ best financial interests in all decisions and fund operations.

Key updates to SPS 515:

Alignment with best financial interests’ duty (BFID):

The removal of the “significance test” means all expenditure, regardless of size or nature, must demonstrate alignment with the BFID, ensuring every dollar spent serves members’ best interests.
Direct links to the Retirement Income Covenants:

SPS 515 now directly refers to the SIS Act Retirement Income Covenants, supporting its implementation through monitoring retirement incomes in the Business Performance Review (BPR).
Triennial review of Retirement Income Strategy:

SPS 515 mandates that Registrable Superannuation Entity (RSE) licensees review their retirement income strategy (RIS) for appropriateness, effectiveness and adequacy at least every three years, suggesting trustees seek advice from an operationally independent and experienced individual.
Focus on financial resource management:

Trustees must now have a capital management plan to govern the use of financial resources held at the trustee company level and policies for each fund reserve, detailing usage, target amounts or ranges and establishment and replenishment timelines.
Improved risk management for fund transfers:

SPS 515 now also links to CPS 190 Recovery and Exit Planning and outlines requirements for trustees regarding fund transfers, previously covered under SPG 227.

Immediate actions for trustees

While some aspects of SPS 515 remain unchanged, including the overall format of the Annual Outcomes Assessment (AOA) and BPR, trustees should review the updated SPS 515 and ensure compliance by 1 July 2025. This is an opportunity to enhance business planning processes for improved member outcomes.

If not already done, trustees should:

Conduct a comprehensive gap analysis to identify compliance needs related to the new standard and guidance.
Assess whether expenditure management frameworks have well-defined processes, including controls and governance delegations, to monitor whether expenditure meets expected outcomes. The framework needs to demonstrate that expenditure contributes to strategic objectives in an objective and measurable way (e.g. the impact of advertising spend).
Incorporate RIS outcomes into the BPR, using specific and measurable quantitative and qualitative metrics. APRA expects trustees to measure improvements in member retirement income outcomes resulting from the RIS. Many trustees have begun defining these metrics and building RIS scorecards over the past year. A triennial review of the RIS should be conducted by someone operationally independent.
Holistically assess financial capital management and reserving policies, considering changes to incorporate the updated broader requirements.
Continuously enhance member cohorting processes by acquiring relevant member data, applying public data overlays, and improving data analytics capabilities.
Review the financial projections underpinning the strategic business plan, ensuring they cover various potential scenarios over the plan’s term.
Update the member outcomes policy if one was created when SPS 515 was first introduced.

Collaboration across all business units is essential to meet these new requirements effectively. By working together, your fund will not only comply with SPS 515 but also enhance the value delivered to your members.

Contact us today to discover how Mercer’s experts can transform your approach to SPS 515, turning compliance into a strategic advantage that enhances member outcomes and drives organisational success.

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Navigating the updated SPS 515: Elevating member outcomes beyond compliance

Key updates to SPS 515:

Immediate actions for trustees

Introducing some of our team

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