POWERED BY MOMENTUM MEDIA
APRA consults on improvements to successor fund transfers
The Australian Prudential Regulation Authority (APRA) has begun consultation on measures to enhance planning by superannuation trustees in case they need to transfer members in or out of their fund.
This was prompted by a period of heightened transfer activity following the annual performance test and heatmaps.
Updates included requirements – previously only guidance - for all transfers to be prepared for future member transfers and requirements relating to the transfer of MySuper assets within 90 days in the event that APRA cancelled a trustee’s authority to offer a MySuper product.
APRA deputy chair, Margaret Cole, said problems with successor fund transfers could erode benefits to members.
“One of the best ways for trustees to improve outcomes for their members is through a merger that delivers the benefits of increased scale, or by transferring them to a better-performing fund.
“The transfer process itself, however, isn’t always straight-forward, and that can be exacerbated when a lack of robust planning puts members at risk of a protracted, costly or failed transfer that fails to improve their outcomes.
“With industry consolidation likely to increase in coming years as poor performers and those with sustainability issues exit, and strong performers seek a competitive edge, it’s important all trustees are prepared to initiate a timely transfer of members where indicators point to this achieving better outcomes for members.”
APRA would also look to strengthen and simplify the transfer planning guidance contained in Prudential Practice Guide SPG 227 Successor Fund Transfers and Wind-ups.
Consultation on the transfer planning proposals was open until 10 March, 2023 and the prudential regulator intended to release draft transfer enhancements in the first half of 2023.
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
