The Australian Prudential Regulation Authority (APRA) is inviting applications for acting trustees to replace some of the trustees who will be in breach of the Superannuation Industry (Supervision) Act 1993 (SIS Act) at the conclusion of the superannuation licensing transition period on 30 June 2006.
Approximately 90 per cent of trustees that have not applied for a Registrable Superannuation Entity (RSE) licence have made adequate preparations to either wind-up their funds or transfer to a licensed trustee.
APRA acknowledges that some of the trustees in this group will be prevented from finalising alternative arrangements due to circumstances beyond their control. Approximately 130 trustees are expected to fall into this category, where members and assets have been transferred out of the fund and only 'administrative' tasks prevent its wind-up. These tasks may include unexpected delays in signing-off final audited financial accounts, unexpected delays in lodging final tax returns and making final payments, unexpected delays in lodging or processing the switching return to the Australian Taxation Office, or delays in divesting an illiquid asset.
"In these situations, APRA will consider accepting an Enforceable Undertaking from the trustee to remedy the breach within a stipulated timeframe," said APRA Deputy Chairman Mr Ross Jones. "This appears to be the most sensible and efficient course to avoid unnecessary disruption and expense or prejudice to members," he added.
However, APRA anticipates that around 70 of the trustees who have not applied for an RSE licence will not have taken satisfactory measures to complete the exit of the entities under their trusteeship by 30 June 2006. Those 70 trustees account for 0.4 per cent of APRA-regulated superannuation assets.
"While the vast majority of trustees have made a genuine effort to comply with the law, a small proportion has not done so, despite monitoring and regular communications from APRA, since January 2004, on the need to complete arrangements by 30 June 2006. It's disappointing that this small number of trustees have failed in their obligations to members," said Mr Jones.
From 1 July 2006, APRA will have power, under s. 133 of the SIS Act, to remove such a trustee from an RSE, with the Minister's consent. In these situations, APRA is required under section 134 of the SIS Act to appoint an acting trustee in its place.
Acting trustees must be licensed under Part 2A of the SIS Act. Those interested in being eligible to replace unlicensed trustees must apply for an acting trustee licence. Expressions of interest and applications for acting trustee licences must be received by APRA by close of business, Friday 26 May 2006.
The application and related guidance are available on APRA's website at: http://www.apra.gov.au/Superannuation/Superannuation-Licensing.cfm. Parties requiring further information can contact APRA's Superannuation Licensing Help Desk on 02 9210 3344.
Background
325 trustees have sought an RSE licence during the superannuation licensing transition period. As at 11 May 2005, 248 licences have been issued.
The trustees of 876 superannuation entities did not apply for a licence and have made or are in the process of making alternative arrangements for the entities for which they are a trustee.
To date, 480 trustees have made satisfactory alternative arrangements. There are approximately 400 funds to be transferred or wound-up prior to 30 June 2006.
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:
Pauline Hayes, Public Affairs Manager
Australian Prudential Regulation Authority
Telephone: 02 9210 3143
Mobile: 0417 528 660
All other inquiries:
APRA Contact Centre
1300 131 060
