The 2024 amendments to Australia’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime represent a structural shift in compliance expectations. While much attention has focused on newly regulated “tranche two” entities, superannuation funds—already classified as reporting entities—face significant implications that demand immediate attention.

These reforms do not introduce brand-new obligations for super funds. Instead, they clarify and raise the bar for how trustees are expected to implement AML/CTF controls across fund administration, onboarding, transaction monitoring, and governance. For an industry managing over $3.5 trillion in assets, the stakes are high.

Understanding AUSTRAC’s AML/CTF Regime and Super Funds' Role

Superannuation funds have long been subject to the AML/CTF Act 2006. Specifically, they qualify as reporting entities when they offer designated services, such as accepting contributions, transferring benefits, or managing member investments.

While fund administrators and custodians may handle day-to-day compliance processes, AUSTRAC has made clear that trustees retain ultimate responsibility for the fund’s AML/CTF program. This includes ensuring that customer due diligence (CDD), suspicious matter reporting (SMR), and ongoing transaction monitoring are fit-for-purpose.

What Changed in the 2024 Reform

The AML/CTF Amendment Act 2024 did not single out superannuation, but several core reforms materially affect how funds must manage compliance:

  • The old two-part AML/CTF program structure (Part A and Part B) has been removed. Funds must now operate a single, risk-based program that explicitly integrates AML/CTF risk management, CDD, transaction monitoring, and governance.
  • Customer due diligence expectations have expanded. This includes requirements to conduct risk-based checks on individuals acting on behalf of members, such as financial advisers or holders of power of attorney.
  • The reforms adopt an outcome-focused approach. Funds are expected to align monitoring activity with serious financial crime typologies—e.g., structuring, fraud, and identity misuse—not just apply generic thresholds.
  • The governance standard has been raised. Boards (i.e., trustees) must now receive regular AML/CTF reporting and are held accountable for program effectiveness.
  • New language around proliferation financing risk, while not always high-relevance to super funds, must be addressed in the program risk assessment.

Specific Obligations for Superannuation Funds

Under the 2024 regime, super funds must:

  • Maintain a documented ML/TF risk assessment, reviewed regularly and updated to reflect any changes in services, member demographics, or operating model.
  • Perform initial and ongoing customer due diligence, including identity verification, sanctions and PEP screening, and monitoring for anomalous member activity.
  • Detect and report suspicious matters (SMRs) within 3 business days of forming a reasonable suspicion, in line with AUSTRAC guidance.
  • Monitor for third-party misuse of super benefits, especially where a financial adviser or external party is involved in rollover requests, investment direction, or withdrawal authorisation.
  • Ensure that SMRs distinguish between cases where the customer is a potential criminal actor versus a victim of fraud or exploitation—a subtle but important distinction for fund administrators.

Trustee Governance and Accountability

AUSTRAC’s reform signals a firm expectation: AML/CTF compliance is no longer just a back-office function. It is a board-level responsibility.

Trustees must:

  • Appoint a fit and proper AML/CTF compliance officer, who holds managerial responsibility and can report directly to the board or governing body.
  • Receive periodic compliance reports on the effectiveness of the program, including the number and nature of SMRs, audit outcomes, and monitoring anomalies.
  • Ensure appropriate oversight of outsourced functions, including fund administrators, KYC vendors, and transaction processors. Delegation does not equal abdication—if a breach occurs, AUSTRAC will hold the trustee accountable.

Operational and Technology Implications

Most superannuation funds rely heavily on outsourced service providers for administration, onboarding, and transactional flow. Under the new reforms, this operational model must be re-evaluated.

  • AML programs must reflect the actual division of responsibilities between trustee and administrator. Agreements should clearly define compliance deliverables, data access, and escalation paths.
  • Technology systems must enable real-time or near-real-time monitoring of transactions, flagging of anomalies, and timely SMR reporting.
  • CDD processes must expand to include verification of agents and third-party actors—not just members.
  • Compliance teams must now be equipped to segment alerts for fraud, elder abuse, and financial crime—not all of which are strictly criminal under AML law but still trigger SMR obligations.

Steps Super Funds Should Take Before March 2026

The reforms take full effect for existing reporting entities by 31 March 2026. To meet that deadline, super funds should:

  1. Conduct a gap analysis of their current AML/CTF program against the 2024 reforms.
  2. Update program documentation, especially the ML/TF risk assessment, monitoring rules, and escalation procedures.
  3. Strengthen governance, including formal board reporting, resourcing for compliance staff, and trustee-level oversight.
  4. Review all outsourcing agreements to ensure compliance obligations are appropriately delegated and monitored.
  5. Educate operational teams—both in-house and vendor-side—on the new SMR triggers and third-party actor risks.
  6. Engage with AUSTRAC’s consultation process for industry-specific guidance expected in 2025.

Reform Readiness Checklist for Superannuation Funds

Use this as a practical roadmap to align your fund’s AML/CTF program with the requirements coming into effect by 31 March 2026. Each item maps directly to the obligations introduced or clarified by the AML/CTF Amendment Act 2024.

Program Design & Documentation

  • [ ]  Consolidated AML/CTF program in place (replacing Part A/B structure)
  • [ ]  ML/TF risk assessment reviewed and updated within the last 12 months
  • [ ]  Proliferation financing risks assessed and documented (even if low)
  • [ ]  CDD policy covers both members and third-party actors (e.g. POAs, advisers)
  • [ ]  Monitoring rules aligned to high-risk typologies (e.g. fraud, abnormal withdrawals)

Transaction Monitoring & SMR Reporting

  • [ ]  Alerts configured to distinguish fraud, victimisation, and laundering scenarios
  • [ ]  SMR escalation process reviewed and meets 3-day submission deadline
  • [ ]  Clear thresholds for reviewing high-value rollovers, early release, and unusual activity
  • [ ]  Investigation workflows documented with evidence retention process

Governance & Board Oversight

  • [ ]  Trustee board receives AML/CTF updates at least quarterly
  • [ ]  Compliance officer formally appointed, resourced, and meets ‘fit and proper’ test
  • [ ]  Outsourcing agreements reviewed for AML/CTF responsibility clauses
  • [ ]  Internal audit scheduled to test program effectiveness before March 2026

Operational Integration

  • [ ]  Fund administrator agreement includes AML obligations and reporting standards
  • [ ]  CDD/KYC platforms support dynamic risk scoring and PEP/sanctions screening
  • [ ]  Staff trained on distinguishing reportable conduct vs general fraud
  • [ ]  Record-keeping aligns with both AML retention rules and Privacy Act

Conclusion: The Quiet Reform With Major Consequences

The 2024 AML/CTF reforms were not designed with superannuation in mind, but their impact on the sector is real. Trustees are now expected to lead from the front, not just sign off from behind the scenes.

Compliance is no longer a procedural obligation. It is a board-level, risk-based commitment to protecting members, preventing misuse, and maintaining Australia’s financial integrity.

If you're a fund manager, superannuation administrator, SMSF platform, or trustee, now’s the time to modernize your compliance stack. Funds that prepare early will gain operational confidence and regulatory clarity. Those that delay risk reputational damage, enforcement exposure, or worse—becoming the weakest link in the AML chain.

Flagright’s AI-native screening and transaction monitoring platform helps you stay ahead of regulatory pressure without sacrificing operational efficiency. We work with financial institutions across APAC to help automate compliance, reduce false positives, and stay audit-ready at all times.

Reach out to our team to see how we can help your organization comply with the latest AML/CTF standards with speed, precision, and confidence.