Ultimate super outcomes the key - APRA

2 September 2014
| By Mike |
image
image
expand image

The Australian Prudential Regulation Authority (APRA) has used its second submission to the Financial Systems Inquiry to warn against adopting a too simplistic analysis of costs and fees in the superannuation sector.

While acknowledging that the Inquiry's focus on the efficiency of the superannuation sector and its costs and fees is appropriate, the submission warned that any assessment of the efficiency of the sector had to be "framed in terms of the ultimate outcomes achieved for members".

"For any given pattern of contributions, members' outcomes are driven primarily by investment performance, but insurance and other benefit design aspects, fees, costs, taxes and the form and timing of benefits taken by members are also relevant considerations," the APRA submission said. "It is important to take into account all of these factors when making comparisons with other jurisdictions."

The regulator's submission also welcomed the inquiry's support for importance of regulator independence but referenced its earlier claim that while "APRA has substantial independence from Government in most respects …, over time, this has been eroded by constraints on its prudential, operational and financial flexibility.

"APRA would therefore strongly support mechanisms that move it to a more autonomous budget and funding process, thereby enhancing APRA's operational independence and ability to conduct efficient forward planning for its operations," the submission said.

"A more autonomous funding process would need to be accompanied by increased accountability and transparency regarding how APRA utilises its resources."

"To effectively perform its role, APRA needs to be able to attract suitably skilled and experienced staff. This is more difficult if APRA is unable to maintain the relativities of its own employment conditions with those of the financial sector, from which APRA does the bulk of its recruitment. Any enhanced budgetary process should be designed with this in mind," the submission said.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

3 days 8 hours ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

3 days 8 hours ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

3 days 9 hours ago