The Australian Prudential Regulation Authority (APRA) has outlined a range of tough proposals to reduce wasteful spending by super funds and lift governance of the sector.
The proposals would force boards to prove that any money spent would have a clear benefit for members.
APRA’s proposals would also make it tougher for funds to offer life insurance inside super funds and force them to undertake better business planning.
These super reforms have been criticised by industry funds which, in a submission to Treasury, claim that the overhaul ignored the “long-term systemic underperformance of the retail sector”. In other words, bank-owned super funds would not be subject to the new rules.
According to the submission obtained by The Australian: “On face value, the high-level objectives of the bill seem quite reasonable, but regrettably this reform package requires significant amendment to deliver on its potential to improve member outcomes, accountability and transparency.
“The reform package would increase the regulatory burden on industry and other not-for-profit super funds, yet allow bank-owned and other retail funds to resist scrutiny and reform.
“[It] is an example of both the Government’s inability to impose real reform on the big banks, and its determination to shoulder industry and other not-for-profit funds out of their way.
“It is unfathomable why the reform package has disregard for improving member outcomes in the poorest performing parts of the industry administered by bank-owned super funds, while imposing further scrutiny largely on not-for profit funds.
“Members are entitled to expect their super savings are being managed transparently and in their best interests regardless of whether they are a MySuper or Choice member.”
Super funds have until the middle of September to give feedback about the proposed changes.
Are you happy with your super fund? Do you feel it acts in your best interests? Are you with an industry or retail fund?