Australian Prudential Regulation Authority (APRA) chair, Wayne Byres, says the regulator is eyeing sub-standard superannuation products and practices through a combination of the performance tests, heatmaps, intensive supervision and a “muscular” approach to enforcement.
Appearing at FINSIA's ‘The Regulators’ event, Byres said the superannuation system could be improved.
“Put simply, when it comes to superannuation, good enough isn’t good enough,” he said.
“We still have too many trustees that could do better – including, in some cases, by handing their responsibilities to someone else.”
With the Retirement Income Covenant coming into effect in July, Byres said the superannuation industry needed to turn its focus to the provision of retirement products.
“As the superannuation system matures, and an increasing proportion of Australians move into the retirement phase, much greater attention needs to be given not just to how superannuation savings are managed, but how they are accessed in retirement. This is a space ripe for innovation and new thinking.”
Byres also said APRA would be targeting two “foundational regulatory initiatives” aimed at bettering existing regulation, starting with modernising the prudential architecture.
“As financial system risks have evolved, the prudential framework has grown. In total, we now have around 150 prudential standards and practice guides, supported by a myriad of information papers, industry letters and FAQs. It could do with an overhaul.”
The second initiative was the implementation of the five-year financial data collection roadmap APRA laid out in March.
“The March roadmap sets out a plan for each industry that’s been tailored to reflect the work already underway on new data collections, the expected regulatory policy agenda, and the industry’s capacity to accommodate change.
“Again, it’s an ambitious project and we’re keen to make sure we have active and regular engagement with industry participants as we work our way through it.”
Michael Lovett, who left the investment firm just three months after launching its Vanguard Super offering, has taken up a chief executive role at an Australian asset manager.
The Central Bank of Ireland has granted the approval of Equity Trustees’ exit from its Irish operations, with the transaction expected to be complete on 30 April.
Super returns continued to climb in March, raising hopes of delivering double-digit returns by June depending on the performance of this next quarter.
The dedicated super fund for emergency services and Victorian government employees is under fire for unpaid entitlements to transport employees, which could exceed $40 million.
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