Are you ready for RG 271?

This article was co-authored with Toni Mathers.

Following a recent survey of superannuation entities, ASIC has announced that there is room for improvement as trustees prepare for the commencement of Regulatory Guide 271 (RG 271) – specifically in relation to governance, the expanded definition of a ‘complaint’, response timeframes, systemic issues and data capture.

On governance, ASIC’s survey found that 29% of respondents were yet to brief their boards on RG 271, despite the significant changes that are likely to be required under the new obligations. Although it is common for superannuation funds to outsource their IDR processes, ASIC has recommended that trustees consider if they are satisfied that their IDR provider meets the standards of RG 271, and should regularly carry out their own quality assurance processes. Similarly, when highlighting the new expanded definition of ‘complaint’ under RG 271 – which now includes objections to death benefit distributions – ASIC has emphasised the importance of ensuring that this new definition is properly embedded in all areas of IDR compliance, including data collection and complaints reporting.

Of all the areas of improvement, ASIC was most positive about trustees’ preparation ahead of the new IDR response timeframes, noting that some trustees have already taken steps to improve compliance with the new response timeframes. ASIC encouraged trustees to continue to consider whether they may face any barriers to implementation. Conversely, ASIC noted trustee preparedness for systemic issue identification was less advanced and required further work around systemic issue identification, escalation, management and reporting.

Finally, on data capture, ASIC has recommended that trustees consider the practical implications of using IT systems to record complaints that differ across operational areas. An in depth knowledge of ASIC’s new data dictionary and data glossary will be critical to informing trustees of the information that is required to be collected and reported.

In announcing these five key areas of improvement, ASIC also stressed the need for all trustees to be consumer-focused and put their customers first when handling complaints. Indeed, this emphasis on having a consumer-focus reflects ASIC’s current regulatory approach more broadly, and demonstrates a cultural shift away from viewing complaints through a risk or compliance lens. Each of the five areas identified by ASIC also brings into focus, for other financial institutions as they prepare for RG 271, its main areas of attention.

As you prepare for RG271, in addition to a number of other upcoming regulatory reforms later this year, we encourage you to consult our article on the Perfect Regulatory Reform Storm and ensure your organisations are up to these regulatory challenges. Please reach out to us if you’d like to know more.

This article was co-authored with Toni Mathers.