APRA signals changes to reporting standards

Superannuation funds are facing key changes to the way they report to the Australian Prudential Regulation Authority (APRA) with the regulator signalling it wants to require more explicit disclosure of expense categories.

APRA’s intentions were revealed by the regulator’s deputy chair, Helen Rowell during Senate Estimates when she acknowledged that what funds were reporting to APRA was not necessarily what they were reporting to super fund members.

Under questioning from Queensland Labor Senator, Chris Ketter, Rowell said there was nothing sinister in the different disclosures.

“It's not that they're [the funds] not disclosing the correct position; it's that the information that is being reported is being reported in accordance with accounting standards,” she said.

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Rowell dismissed the suggestion that funds were “gaming” the system saying: “They are not gaming it; they are applying the accounting standards as they are in force and as they are able to do. The information that is reported and disclosed there is primarily about what are the inflows and outflows on a gross and net basis. The end result in terms of the impact on the fund isn't any different; it's just the categorisation of it that is not as explicit as ideally it could be”.

Asked if the situation could be fixed, Rowell said that, in essence, APRA needed to amend its reporting standards to require more explicit disclosure by expensive categories, and to “define what be reported in different buckets, and get the funds and the trustees to report on that basis and so move away from the accounting standards”.

The APRA deputy chair said it was something the regulator intended to begin consulting on shortly.