Opening statement for Senate Economics Legislation Committee’s Inquiry into the Treasury Laws Amendment (Your Future, Your Super) Bill 2021
Helen Rowell, Deputy Chair - Senate Economics Legislation Committee, Sydney
Thank you for the opportunity to appear before the Committee.
As the prudential regulator for superannuation, APRA’s primary mandate is to protect the interests of members by ensuring outcomes for superannuation members are at the forefront of decision-making by trustees, and that trustees possess the skills, experience and processes in place to do this effectively. Indeed, “improving outcomes for superannuation members” is one of the four primary strategic goals outlined in our 2020-2024 Corporate Plan.
APRA has made substantial progress over many years in lifting industry standards, boosting transparency and weeding out persistent underperformers, including through our MySuper Product Heatmap, which resulted in significantly reduced fees and costs in its first year. Instances of persistent underperformance remain, however, and there is much more to be done.
As we outlined in our submission, APRA supports the Government’s Your Future, Your Super reforms. In particular, clear benchmarks, with consequences should they not be met, will sharpen and strengthen the work APRA is doing to protect and improve outcomes for superannuation members.
Amending the best interests duty to be the best financial interests duty, and increasing transparency of trustee expenditure, will sharpen trustees’ current obligations and will leverage the enhanced reporting requirements that APRA has been working to implement.
The reforms work together with, and will strengthen, the current legislative and prudential frameworks that govern the complex superannuation system and its supervision by APRA and our peer regulators. APRA has been working closely with the Treasury, the Australian Taxation Office (ATO) and the Australian Securities and Investment Commission (ASIC) in relation to these important reforms and looks forward to assisting the Committee during its deliberations.
With those opening remarks, we are happy to take your questions.
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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 $7.9 trillion in assets for Australian depositors, policyholders and superannuation fund members.