The fitness and propriety of super fund directors has been highlighted as an area of concern by the Australian Prudential Regulation Authority (APRA) in its 2012 annual report.
APRA said non-compliance with trustee policies and procedures was a recurring issue, which was particularly prevalent in the case of the fitness and propriety of directors and responsible officers.
It said the management and oversight of outsourced service providers was another area of contention.
"Trustees have been devoting more attention to risk management, but further progress is needed
to meet APRA's expectations and achieve the level of maturity of other APRA-regulated industries," APRA Chairman John Laker said.
Risk management functions suffer from under-resourcing, according to APRA, which said improvements could be made via detailed reporting to, and engagement by, trustee boards.
The regulator also flagged liquidity as an area of future scrutiny, saying trustees needed to guard against complacency in their liquidity management.
APRA said although it had noticed an improvement in trustees' liquidity management - including greater use of stress testing - there had been "little tangible improvement in the area of frozen funds".
A number of underlying schemes were being restructured or terminated, with trustees working with scheme managers to obtain redemptions or return to capital.
APRA said it would continue to grant applications from portability schemes.
The regulator said that although the Stronger Super reforms did not necessitate fund mergers, capital gains tax relief would continue to encourage mergers. APRA said trustees needed to guard against the risks of failed mergers.
Australia’s second largest super fund has added thermal coal companies to its list of investment exclusions.
The fund has expanded its corporate superannuation solutions to partner with Australian businesses of all sizes.
The chief executive of Aware Super anticipates a significant shift in how ESG factors will influence portfolio values in the next six years, surpassing the changes witnessed in the past two decades.
In a recent statement, shadow assistant minister for home ownership and Liberal senator for NSW, Andrew Bragg, accused ‘big super’ of fabricating data attributed to the Reserve Bank of Australia to push their agenda.
Add new comment