After failing to direct member contributions into a MySuper product, APRA has ordered Insignia Financial-owned OnePath Custodians to pay $1.5 million.
In an announcement on Wednesday morning, the regulator said the infringement notice was issued after it became aware that OnePath failed to direct 125 default member contributions to a MySuper product from mid-2022 onwards.
Under the Superannuation Industry (Supervision) 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 Deputy Chair Margaret Cole said in a media release that trustees who 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,” she said.
“APRA takes these provisions seriously and will act swiftly in deploying its enforcement toolkit where trustees fall short of our expectations.”
The trustee cannot use any of the $35 billion worth of funds belonging to its 700,000-plus member base to pay the fine.
APRA said it would closely monitoring OnePath to ensure any members who suffered financial losses because of these breaches are fully compensated as soon as possible.
In a statement, OnePath chair Lindsay Smartt said the member funds were incorrectly sent to a Choice option rather than MySuper.
“[OnePath] is committed to continuing to uplift its governance, compliance, and risk management frameworks, and is working closely with the regulator to meet its expectations,” Smartt said.
OnePath was one of the four Insignia super trustees APRA imposed licence conditions on last year due to governance and risk management deficiencies.