The Australian Prudential Regulation Authority (APRA) has confirmed that the findings of the Trade Union Royal Commission has prompted it to take another look at superannuation funds and related party arrangements.
APRA chairman, Wayne Byres has told the Senate Economics Legislation Committee that APRA has been reviewing the outcome of the Royal Commission as it relates to superannuation funds and particularly related party arrangements.
“Although no matters were specifically referred to APRA, the observations and findings of the Royal Commission identified some similar themes to APRA’s 2014 thematic review of the management of conflicts of interest,” he said.
“As a result, we will be undertaking further review of related party arrangements — for all types of funds — to ensure trustees can demonstrate such arrangements are consistent with their obligations to pursue members’ best interests.”
Byres said the review would enable APRA to look more deeply into current practices, assess the extent to which areas for improvement highlighted in the regulator’s 2014 thematic review had been addressed, and identify where further improvements in practices are still needed.
“Board appointment, renewal, and performance assessment processes are also areas where industry practices could be improved,” the APRA chairman said, noting that in a letter to trustees in December 2015, APRA had advised the industry of proposed changes to APRA’s prudential standards and guidance to support enhancements in these areas.
