POWERED BY MOMENTUM MEDIA
APRA lays out changes to scale test
The Australian Prudential Regulation Authority (APRA) has written to all superannuation funds explaining the consequences of the Treasury Laws Amendment (Improving Accountability and Member Outcomes in Superannuation) Bill 2017 particularly in relation to the scale test.
The letter, signed off by APRA deputy chair, Helen Rowell kicked off by pointing out the manner in which the proposed legislation expands the scale test to an “outcomes test”, requiring trustees to determine annual, in writing whether the financial interests of members in their MySuper products are being promoted “on a basis that goes beyond the number of beneficiaries or amount of assets of the fund”.
“APRA will consider appropriate changes to the prudential framework, including issuing prudential guidance, to support RSE [Registrable Superannuation Entities] licensees’ compliance with this legislative obligation,” Rowell’s letter said.
Her letter also pointed to the implications with respect to accountability and improved expense transparency, noting that the legislation included proposed amendments to permit APRA to collect additional data about RSE licensee expenditure on a look-through basis.
“Similar to APRA’s capacity to collect certain information relating to RSE investments on a look-through basis, this power would permit APRA to require that RSE licensees report to APRA the ultimate purpose and destination of payments from the RSE,” it said. “APRA will therefore consider mandating reporting of the chain of associated transactions to identify the final recipient (associated or otherwise) and purpose of relevant payments.”
The regulator said that to achieve this, it proposed to amend the superannuation reporting collection to collect both look-through expense information and to make the current reporting of expenses of superannuation funds clearer and more consistent.
“APRA is also considering an expansion of the existing RSE licensee-level data collection to provide increased transparency about expense activities within RSE licensee business operations,” it said.
Recommended for you
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 Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
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
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
