The Australian Prudential Regulation Authority (APRA) completed on 30 June the transition to the new trustee licensing system for Australia's superannuation industry.
Of 325 applications received, 307 trustee companies have received the new Registrable Superannuation Entity (RSE) licence, while 17 applications were withdrawn and one was rejected as it did not fully meet the criteria. This application was not for a public offer licence.
Collectively, RSE licensed trustees manage around 6,900 RSE registered funds - including approximately 6,300 'small APRA funds' (SAFs) - with combined assets of around $500 billion out of a total of $905 billion in super funds. Exempted funds and self-managed super funds, neither of which are APRA-regulated, account for the remainder.
One of the Government's major reforms in superannuation safety has been implemented," APRA Deputy Chairman Ross Jones said.
The superannuation industry is now licensed and prudentially regulated in a similar way to banking and general and life insurance. The Government required RSE licensing of superannuation trustees to enhance the safety of members' funds. Licensees are required to comply with new standards covering proper governance, managing relationships with third parties, maintaining adequate resources and implementing sound risk management systems."
At the start of the two-year transition period, a total of 1,200 trustees operated around 9,000 funds, including SAFs. Many trustees decided not to apply for an RSE licence and made arrangements for the transfer and wind-up of the funds under their trusteeship.
Of those trustees which did not apply for a licence, 145 were unable to wind-up the entities under their trusteeship before the end of the transition period on 30 June due to reasons beyond their control. APRA therefore entered into undertakings with them so they could continue their wind-ups post 30 June. Members of these funds have already been transferred to RSE registered funds.
However, another five trustees did not make adequate arrangements for their funds. APRA has had to appoint acting trustees to these funds to ensure an orderly exit. Mr Jones said it was disappointing these trustees did not fulfil their obligations over the past two years. The interests of the members are being safeguarded by the appointment of the acting trustees.
The end of the transition period is a significant milestone, but it also marks the start of more risk-based supervision of the superannuation industry for APRA," Mr Jones said. In one sense, the real work is about to begin to ensure trustees meet the obligations to which they have committed themselves."
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
