The Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation Measures No. 1) Act 2019 gives APRA the power to issue directions to a trustee before they breach the law and to take civil penalty action against trustees and directors that do breach the law or their obligations to members.
“APRA welcomed these new powers and has already used them to resolve a number of entity issues,” APRA chairman Wayne Byres wrote in the annual report.
APRA has previously said that it would name and shame underperforming super funds in the wake of the royal commission, and that it was looking for ways to provide greater transparency about funds without impacting the financial interests of members.
While Mr Byres wrote that the powers were “game changers”, he did not name the entities they had been used against in the annual report.
The comments come as APRA also doubles down on its goal to improve the superannuation sector by forcing underperforming funds out of the industry.
From 1 December the prudential regulator will have a dedicated supervisory division for super that will identify and address issues of underperformance in super funds.
“Those trustees that are willing and able to rise to the challenge will enhance the retirement incomes of their members, as well as help secure their continued participation in the industry,” APRA deputy chair Helen Rowell told the Australian Institute of Superannuation Trustees Forum on October 14.
“On the other hand, those that are unwilling or unable to rise to the challenge will find APRA intensifying the pressure to improve the member outcomes they deliver – and we have new tools and powers that we can exercise to make clear that change is not optional.”
The annual report also touched on several other issues, including the growing importance of cyber security to the increasingly digitalised finance sector, the impact of very low interest rates, trade tensions, and slowing global growth.
