Super trustees to come under ‘more intrusive regulation’

Superannuation trustees can expect to see “more intrusive regulation and scrutiny” in the future as the Australian Prudential Regulation Authority (APRA) explores enforcement activity in the space.

Cole, who joined the board of APRA in July, said there were numerous challenges facing superannuation. However, the main one she highlighted related to scrutiny and the responsibilities of trustees.

“I guess the first word that comes to mind is scrutiny. With the responsibilities they bear, trustees must expect more intrusive regulation and scrutiny.”

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There were also challenges relating to size, scale and efficiency and she said she expected to see further consolidation of super funds to bring down fees. By the end of her five-year term, she said, she hoped to see more of the industry having consolidated.

“There will clearly be further consolidation to make sure the administration of funds is as efficient as possible, and to reduce member fees. We’re also reaching a point where a lot of people have gone from building up their retirement pot to drawing on it, and that brings challenges. The super industry needs to think more about the retirement phase for members and not just the accumulation phase,” she said.

“But the other side of the equation is that we need a vibrant, competitive landscape, so there has to be a balance between consolidation and competition. Other government agencies will have more of a focus on the competition side, but I think APRA needs to keep this in mind, too.”

Prior to moving to Melbourne two years ago, Cole worked in London as a director of enforcement for the UK regulator, Financial Services Authority, (now the Financial Conduct Authority) and said she had a “tough but fair” approach to enforcement.

“My reputation is not only tough but fair, and I think my record shows I’m not afraid to take tricky things on. I do feel there’s an expectation on APRA to use its powers, and rightly so,” she said.

“The demonstration effect of public enforcement activities is important, but consistent with APRA’s Enforcement Review, I don’t equate enforcement with always having to go to court to litigate. For me, there are a variety of different approaches to enforcement that can help to achieve the right outcome depending on the circumstances.”

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