The Association of Superannuation Funds of Australia (ASFA) has asked the prudential regulator to better outline its expectations of registrable superannuation entity (RSE) trustees.
In a submission response to an Australian Prudential Regulation Authority (APRA) discussion paper, Prudential guidance for superannuation, released by APRA on 11 December 2012, and the accompanying suite of draft prudential practice guides, ASFA suggested APRA include a new section in each guide.
The proposed section would set out APRA's expectations regarding an RSE licensee's use of the guide, and how the licensee should interpret terminology which indicates APRA has a firm view on a particular matter.
This was in response to APRA's use of terminology such as "APRA expects" within its PPGs. ASFA proposed RSE licensees should be able to outline an alternative position and justify that course of action in certain cases where the licensee varied from APRA's outlined expectations.
ASFA also proposed a change to the wording of a passage, SPS250, relating to "insurance arrangements".
ASFA said a new list of insurance items in SPS250 included items that are not in the original passage and arguably should not be. The association recommended SPS250 be updated to specify the items that should be considered by trustees, or deleted altogether.
In other proposed changes, ASFA recommended the section on board committees be reviewed to provide clearer direction on the appointment of non-directors to board committees.
Regarding a passage on offshoring, ASFA also recommended that, with respect to investment management agreements, the guidance be expanded to state that it is sufficient for APRA to review the RSE licensee's risk management framework with respect to offshoring investments prior to their first investment offshore but not with respect to each and every subsequent change.
