The Australian Prudential Regulation Authority (APRA) today reminded superannuation trustees who did not apply for a Registrable Superannuation Entity (RSE) licence of their legal obligation to make alternative arrangements for their fund members.
APRA gave notice on 3 February that it would not accept applications from existing trustees in the period 17 February to 30 June 2006. Under the Superannuation Industry (Supervision) Act 1993 (SIS Act), superannuation contributions cannot be remitted to an APRA-regulated superannuation fund after 30 June 2006, unless that fund has been registered and the trustee of the fund licensed.
APRA Deputy Chairman Mr Ross Jones said APRA has been informing and working with trustees since January 2004 to ensure they were aware of their legal obligations.
"APRA is continuing to work with those trustees who intend to exit the industry to ensure their members' best interests are protected and their continuing funds are transferred to a registered entity under a licensed trustee", he said.
"One of the options available to APRA after 30 June to deal with trustees who have made no attempt to comply with the law is to replace the trustee with an acting trustee."
"But we hope trustees exiting the industry do not put themselves or their members in this position by not making the necessary transfer arrangements."
Of the 850 trustees who indicated their intention to exit the industry, around half have completed the task. APRA has been individually informing each of the trustees yet to exit the industry of their obligations to be completed before 30 June, including:
- arranging the equitable transfer of members' benefits to an approved fund;
- ensuring their members are properly informed of the transfer arrangements and their options;
- auditor certification of transfer arrangements for APRA review; and
- windup certification for APRA review.
Trustees need to undertake these requirements in a timely way so as not to disadvantage their members.
The two-year transition period ending 30 June 2006 was to allow trustees sufficient time to either obtain a licence or make alternative arrangements for the members.
Of 325 RSE applications received, APRA has so far issued 129 RSE licences with the remainder being assessed.
The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, friendly societies, and most members of the superannuation industry. APRA is funded largely by the industries that it supervises. It was established on 1 July 1998. APRA currently supervises institutions holding approximately $2.2 trillion in assets for 20 million Australian depositors, policyholders and superannuation fund members.
Media and industry inquiries only:
Stuart Snell, Head of Public Affairs
Australian Prudential Regulation Authority
Telephone: 02 9210 3384
Mobile: 0407 250 276
All other inquiries:
APRA Contact Centre
1300 131 060
