Despite retail master trusts often being the subject of criticism, it has been industry super funds which demanded most attention from the Australian Prudential Regulation Authority (APRA) with respect to supervisory actions around unit pricing and conflicts of interest.
APRA data provided in response to parliamentary questions has revealed the regulator spent more time with industry funds than retail master trusts on unit pricing and conflict-of-interest issues.
However, the regulator's involvement with the funds stopped short of enforcement actions.
APRA had been asked by Tasmanian Liberal Senator David Bushby a number of questions on notice relating to enforcement actions over flawed unit pricing and asset valuation practices, as well as actions with respect to unresolved conflict-of-interest issues.
It is understood Senator Bushby's questions had been prompted by reporting around the controversy which enveloped MTAA Super , and discussion around liquidity issues driving fund mergers.
The issues were taken on notice by APRA following questions initially asked during Budget estimates.
APRA responded that while there had been no enforcement actions taken against any superannuation funds in the last three years in relation to flawed unit pricing and/or asset valuations, where it has identified concerns surrounding the practices of a superannuation fund, "it will make recommendations or require changes in practices".
It said such recommendations were generally aimed at moving the trustee's practices closer to best practice; but where required changes in processes pointed to deficiencies capable of exposing members to unacceptable risk, the changes were mandated.
APRA said that in all instances of flawed unit pricing or asset valuations errors, compensation had been paid by the fund concerned.
The analysis provided by APRA revealed that industry super funds had dominated activity around unit pricing issues, with corporate funds also demanding the attention of the regulator.
Where conflict-of-interest issues were concerned, industry super funds were also more dominant.
