POWERED BY MOMENTUM MEDIA
APRA tells funds to act swiftly on RIC
The introduction of the Retirement Income Covenant should not be viewed as a “compliance exercise” by superannuation funds, according to Australian Prudential Regulation Authority (APRA) member Margaret Cole.
In a speech to the Financial Services Council, Cole acknowledged it was early days yet for funds to have formal plans, given the rules came into force on 1 July.
However, she urged funds to “move swiftly” to put a plan in place as it would take the whole industry to make significant progress in areas such as advice and product suitability.
“While it is clearly early days in terms of the formal requirement for trustees to have documented plans, this must move swiftly to be more than just a compliance exercise. The reality is that superannuation members are retiring every day, and supporting members to ensure they are best positioned as they move beyond the accumulation phase of superannuation is an imperative.”
Several of Australia’s largest super funds had already outlined what their plans would be as its members moved into decumulation phase and Cole said these were being reviewed with the regulator and results would be published later this year.
“We also intend to publish examples of better practice to assist industry to continue to evolve and strengthen its role of supporting their members in this phase of their superannuation journey,” she said.
Cole also touched on the ongoing consolidation activity in the space and said she expected further fund closures to come.
“ With the industry still at 145 APRA-regulated funds, of which 105 collectively manage less than 9% of assets, I can say that it is our view that the optimal size of the industry remains a fair distance from where we are now.
“You can expect our push to eradicate unacceptable product performance to continue by intensifying pressure on trustees to cease offering high-fee, poor performing products, and through further scrutiny of the Choice sector.”
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
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(%)
