A panel of superannuation board chairs has raised concerns about the possibility of MySuper and the Australian Prudential Regulation Authority (APRA) standards stifling innovation in the industry.
BT Funds Management chair Lynn Ralph said that by forcing all funds into offering a standard MySuper product, the Government would make it hard for funds to differentiate.
While most the APRA's draft prudential standards contained measures that the industry had already begun implementing, Ralph was worried about the regulator's plan to impose operational risk reserves on superannuation funds.
"Different funds and different businesses have to be allowed to make judgements about their risk appetites and the way they run their businesses," she said.
UniSuper chair Chris Cuffe said the APRA standards were starting to look like over-regulation. Risk was a very broad concept, he added.
"Do we need to dictate when our investment managers walk across the road in case they get run over?," Cuffe asked.
Commonwealth Bank Officers' Superannuation Fun chair Neil Cochrane was unsure if the MySuper legislation would achieve its intended result of reducing costs for members.
"In the very short term we're going to find that we're not going to benefit the members at all. We will actually incur many costs putting this new regulation into place. It be many years before we see the benefit of it," he said.
Cochrane added it was important that the industry continue to engage with APRA, something that it had not adequately achieved to date.
AustralianSuper chair Elena Rubin said increased regulation was inevitable as the superannuation system grew larger. While she was happy that APRA had recognised that it needed to adapt its regulatory oversight according to the size of each institution, she agreed with Cochrane that continued dialogue with the regulator was vital.
"We don't want to go into a state where we're too scared to take risks and too scared to innovate, and we can avoid that through dialogue," Rubin said.
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