Australian Prudential Regulation Authority accepts court enforceable undertaking from Cbus, publishes rectification plan and opens SIS Act probe

The Australian Prudential Regulation Authority (APRA) has accepted a court enforceable undertaking (CEU) from United Super Pty Ltd, trustee of the Construction and Building Unions Superannuation Fund (Cbus), to deliver a holistic risk transformation program addressing material prudential concerns. APRA has also published a rectification plan prepared by Cbus, required under additional licence conditions, and commenced an investigation into possible breaches of the Superannuation Industry (Supervision) Act 1993 focused on expenditure management practices. The action follows a prudential review and an independent expert report published in November 2024, which identified significant and persistent weaknesses in operational risk management, alongside concerns related to insurance administration and outsourcing. Under the CEU, Cbus has committed to engage independent experts to review governance, risk management and insurance administration and to assess root causes, produce an integrated plan with clear accountabilities for board approval incorporating APRA feedback, and appoint an independent reviewer to provide assurance over implementation, sustainability and whether further work is required. The CEU is enforceable in the Federal Court if breached and sits alongside, and does not replace, the additional licence conditions imposed in August 2024. APRA will work with Cbus to establish a workable timeframe for sustainable rectification and will hold the trustee accountable for implementing the rectification plan, using supervisory and enforcement tools where warranted. The SIS Act investigation continues, alongside APRA’s broader scrutiny of superannuation fund expenditure management flagged to industry in October 2024.