URBRA, since commencement, utilised the Compliance Based Supervisory model, which emphasised strict compliance to the legal provisions.  To complement the compliance-based sector supervision, URBRA has adopted a risk-based approach to sector supervision, with a view to identifying potential risks and managing them before they manifest. 

The risk-based supervision approach moves away from focusing on strict compliance to specific rules and focuses on the identification and management of risks, prudential supervision, quantitative micro and macro scheme assessment and analysing market practices with the aim of ensuring soundness of retirement benefits schemes and achieving proactiveness in the regulation and supervision of the Retirement Benefits Sector.

Risk-based supervision in the retirement benefits sector, is a structured supervisory approach which focuses on proper identification of potential risks faced by retirement benefits schemes and the assessment of the financial and operational controls in place to manage those risks.  It incorporates traditional financial and qualitative analysis of schemes and then focuses on identifying and preventing problems from occurring.  Hence, it heavily relies on analysis of early warning indicators, market conduct practices and the risk management controls put in place by schemes.

The approach enables the Authority to have a deeper understanding of both internal and external factors that may adversely affect the way licenced entities conduct business, and to better align the Authority’s risk assessment process to the licensees’ management of risks.

The Authority wants to be proactive in its supervisory interventions, and to use a wider range of tools supported by effective analysis of risks. To continue delivering effective supervision, the Authority shall invest in modern management tools, and enhance the number and potential of its workforce.