The boards of superannuation funds will come under the spotlight from the Australian Prudential Regulation Authority (APRA) to ensure funds are meeting their licensing requirements.
"It's been two years since the Registrable Superannuation Entity licence was implemented. Trustees are making a good fist in bedding down their requirements. We have to make sure, however, that the boards and management of super funds don't stand still in meeting their day-to-day obligations," APRA general manager Stephen Glenfield told the Conference of Major Superannuation Funds of Australia event yesterday.
As superannuation funds grow their funds under management, Glenfield said it was important that trustees had the skills to manage this growth.
"Being in the front line, boards and management have to keep pace with their risk management. They can't just stick their plan in a cupboard and forget about it," he said.
Outlining APRA's priority list, Glenfied said the regulator would keep a close watch on the fit and proper test that is applied to trustees. This means that the regulator will ensure that trustees receive ongoing training.
Breach reporting will also be on the APRA watch list.
"Breach reporting is a good tool to see whether the system is working. We have to ensure that trustees are doing what they said they would do," he said.
APRA will also look at whether trustees have applied due diligence on new products, investments and member initiatives.
"We will be looking to see whether trustees have had the appropriate advice in place when implementing such initiatives. We won't be accepting a fly by the seat approach," he said.
