• Superannuation and Pension Funds

    Some services provided by superannuation and pension funds are attractive to criminals wanting to launder the proceeds of crime and to finance terrorism.

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Superannuation and Pension Funds

What are the ML/TF Risks?

Superannuation and pension products and services present various levels of vulnerability. Lower risk products include eligible rollover funds and defined benefits funds where they do not allow members to make contributions.

Higher risk products include accumulation funds and post-preservation accounts, which allow relatively easier movement of funds.

However, specific characteristics make the sector vulnerable to ML/TF and predicate crimes.

The Money Laundering and Terrorism Financing (ML/TF) risks associated with superannuation and pensions include:

  • Low levels of member engagement;
  • Voluntary contributions to accumulation accounts by members, where the source of money is difficult to verify;
  • Payments to members and outgoing rollovers that are vulnerable to fraud and illegal early release;
  • A growing reliance on online delivery of products and services, resulting in less face-to face interaction with customers; and
  • The use of third parties and intermediaries.

Superannuation and pension must ensure the organisation conducts a comprehensive ML/TF risk assessment to identify, assess, mitigate and manage ML/TF risk exposures as a critical first step in complying with AML/CFT laws.

What are the AML/CFT obligations?

In developing responses to obligations under AML/CFT laws and regulations the following steps must be undertaken:

  • Conduct a Money Laundering and Terrorism Financing Risk Assessment;
  • Develop an AML Program that is proportionate to ML/TF Risks;
  • Establish effective Board and Senior Management oversight of the AML/CFT Program;
  • Appoint an AML Compliance Officer;
  • Establish a Customer Due Diligence (CDD) Program including collection and verification of know your customer (KYC) information including Enhanced and Ongoing CDD controls;
  • Implement a ML/TF Risk Awareness Training Program for staff;
  • Implement a monitoring program to identify unusual and possibly suspicious customer activity, transactions and behaviour;
  • Establish a process to report suspicions and other activity specified by AML/CFT law and regulation;
  • Establish Record-keeping controls; and
  • Maintain the ML/TF Risk Assessment and the AML Program as the business and risks change.

How can AML Accelerate help?

AML Accelerate, drawing on unparalleled expertise and real-world experience, has developed an AML/CFT Program Manual for the superannuation and pension fund industry.

Our solutions deliver all the foundational AML/CFT materials including a ML/TF Risk Assessment, a AML/CFT Program, CDD Standards, and a AML Operating Manual, which you can tailor to your specific needs, ensuring your AML/CFT controls are commensurate with your business.

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