APRA has never encountered a fund that couldn’t be merged

The Australian Prudential Regulation Authority (APRA) has denied knowledge of any superannuation funds who wanted to merge but could not find a willing partner. 

Answering questions on notice from Senate Estimates, the regulator said if it did come across such an instance it would be inclined to use its powers to enable the fund to make an orderly exit from the industry. 

Answering questions on notice from Tasmanian Green Senator, Peter Whish-Wilson APRA said it would continue to have discussions with consistently underperforming funds that faced sustainability issues to ensure that they continued to act in their members’ best interests and were clear on the appropriate strategy moving forward, “noting the requirements of Superannuation Prudential Standard 515 ‘Strategic Planning and Member outcomes’ (SPS 515) in force from January 2020”. 

In doing so, APRA referenced the use of its heat maps regime to identify and deal with underperforming funds. 

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“The underlying premise of SPS 515 and APRA’s heatmap publication is to identify underperformance across a range of metrics, so as to prompt trustees to take necessary and appropriate action to improve member outcomes,” it said. 

“This action could include reducing fees to improve member returns, or more extreme action such as an exit or merger. 

“APRA will continue to enhance its data collection and to ensure transparency of fund performance, and to use the full suite of its regulatory powers to ensure trustees are meeting their obligations under the prudential framework.”