APRA welcomes Productivity Commission support for lifting superannuation member outcomes
Deputy Chair Helen Rowell said many of the findings and recommendations in the report aligned closely with APRA’s ongoing focus on ensuring superannuation funds delivered quality, value-for-money outcomes for their members.
“APRA is committed to enhancing the focus of Australia’s superannuation sector on delivering optimum member outcomes. New and enhanced prudential requirements we announced last month included strengthened member outcomes assessment obligations for all superannuation products, and APRA has continued its progress in getting trustees to take action on underperforming funds,” Mrs Rowell said.
“I’m particularly pleased to see the Productivity Commission back our call for parliament to pass legislation that would give APRA greater powers, including to direct superannuation licensees to take specific actions, such as merging or winding up should that be in the best interests of members.”
Mrs Rowell said APRA was already addressing many of the areas where the report indicated the organisation could make changes or improvements.
“With 198 APRA-regulated funds and 26.8 million member accounts spread across the industry, retail, public sector and corporate sectors – including both MySuper and Choice products – the superannuation industry is deeply complex, which poses challenges for both regulators and consumers,” she said.
“APRA has been working with the industry to improve the quality and consistency of superannuation data reporting since 2013, and intends to consult on an expanded and improved data collection in 2019. We are also undertaking a major project to transform the way in which data is collected, stored and accessed for all APRA-regulated industries. Our data modernisation program will make data reporting and publication simpler and more flexible, and the data more accessible, and easier to understand and compare, for all stakeholders, including members. We welcome the Productivity Commission’s recommendation for a cross-agency superannuation data working group that will further contribute to enhanced reporting and analysis on the performance of the superannuation industry.
“APRA has intensified our scrutiny of board governance practices and conflicts of interest management. Further, we have significantly stepped up our efforts to improve co-ordination with other regulators, including the Australian Securities and Investments Commission (ASIC), and are well progressed with a review of APRA’s enforcement strategy. APRA has previously indicated its willingness to take part in a capability review led by appropriately experienced and qualified experts.”
Mrs Rowell said APRA would consider the Productivity Commission’s comprehensive report, together with the financial services Royal Commission’s final report and the Government’s subsequent response, as part of its review of priorities for supervision of the superannuation industry for the next few years.
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, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $6 trillion in assets for Australian depositors, policyholders and superannuation fund members.