Have industry funds confounded APRA on political donations?

The structures around Industry Super Australia (ISA) and Industry Fund Services (IFS) have precluded the Australian Prudential Regulation Authority (APRA) from pursuing any action with respect to the perceived involvement of industry funds in making political donations.

APRA has pointed to the structures in explaining why it a list of political donations provided to it by the chair of the House of Representatives Standing Committee on Economics, Tim Wilson, had not resulted in action by the prudential regulator in terms of breaches of the sole purpose test.

Wilson had derived the list of donations from the Australian Electoral Commission (AEC) and asked: “…will APRA take appropriate action to stop superannuation funds and associated entities donating to political parties out of the retirement savings of Australians consistent with the sole purpose test?”

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However, while acknowledging that “it is difficult to envisage circumstances in which a direct political donation would be consistent with the sole purpose test” APRA went on to explain why no action had been taken.

“Many of the specific examples within the question relate to the activities of Industry Super Australia/Industry Super Network, Industry Super Holdings and Industry Fund Services. These are not APRA-regulated entities, and not subject to the sole purpose test. The sole purpose test also does not apply to ME Bank,” APRA said.

However, it said that it was currently undertaking a targeted review of expenditure by some trustees as part of its review of the implementation of prudential standard SPS 515 – Strategic Planning and Member Outcomes.

“This review will focus on different categories of expenditure by trustees, and the steps they have in place to ensure that such expenditure is consistent with the sole purpose test and meets trustees’ member best interest obligations. Should this review identify any practices of concern, APRA will take appropriate action to ensure these are addressed,” the APRA response said.

“To support APRA’s oversight of the implementation of new prudential standard, SPS 515 Strategic Planning and Member Outcomes, APRA is currently consulting on the collection of more granular data on fund expenditure, including political donations. The reporting standards to implement the expanded data collection requirements are expected to be finalised in the first half of 2021, with the first data collection due in late 2021. This enhanced data will better enable APRA to identify, investigate and take appropriate action in relation to any expenditure that may not be consistent with the sole purpose test.”




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Comments

Comments

Thank you APRA for explaining the crux of the whole union super scam. Part of members' retirement savings is paid as operational cost to union controlled "service providers", who then siphon money off to unions and associated political causes.

This is also why union funds have been moving more of their funds management inhouse over recent years. It gives them greater scope to siphon off more members' money for the unions.

Dear Mr Wilson,

How about this one: "…will APRA take appropriate action to stop for-profit funds and associated entities donating outrageously high salaries, fees and bonuses to themselves out of the retirement savings of Australians?”

Thanks.

Salaries and bonuses at union fund service companies are just as high if not more so. Lots of private sector execs actually shifted to union funds for more money.

Please provide details of salaries and bonuses paid to the senior executives of both for-profit and not-for profit organisations. I dont think this information is publicly available and so would be interested if you could share your inside information please.

Check out today’s article on $1m+ salaries for union snouts

Nothing the industry funds do can touch what the retail and corporate funds do. The retail and corporate funds are way better at grifting. Whole super industry going through its mid life crisis

Your extensive knowledge and investigations to make this claim are based on what?????

Hilarious Jimmy, assuming you're either a industry super rep (you know,, the ones calling themselves 'financial planners' but restricted to selling one product only and providing retention 'advice' to get bonuses etc), or delusional. Unions rivers of gold are far more entrenched with fee rorting at every level and best of all under zero public scrutiny as they're not listed companies. Pretty smart really, much in the same way that evolution made weasels and rats extremely clever.

The 'rivers of gold' line again. Apart from it being released a longtime ago and when it was released it had serious errors. Of course it was an IPA work and of course it wasn't biased very much. Wasn't IPA the place where Wilson was a member? Get the picture.

Oh Dick, you are so pre'dick'table! Anytime a light focusses on the ongoing rivers of gold flowing out of 'not for member profit; union funds, you come up with that old chestnut! Union funds of course are done out of the sweet love and charity that all unions hold towards mankind, right? I mean their own RC never summarised the findings as 'little more than thugs, crooks, perjurers and an environment where these activities not only flourish but are encouraged', but no, of course when it comes to union super they would never dream of getting their greedy snouts into the trough or falsifying figures so returns look artificially enhanced.

As Walter Matthau said to Sophia Loren in Grumpy Old Men 2, "It must be wonderful living in La-La Land. I will have to come visit you there sometime".

At least Retail Funds, Jim, have non lapsing binding nominations and pay Super and Death Benefits to the nomination and, if no nomination, pay to the Will unlike Industry Funds which likes to impose its own morals and without knowing a thing about the deceased's life spends 12 months after the members death deciding if the deceased was in a "relationship" as opposed two people just screwing. Wait until ur child dies Jim and then try dealing with an Industry Fund. I won't REST until this whole ponzi scheme is outlawed as legalised theft and Australian workers are told the truth about super by these self righteous former Prime Ministers. Very few pollies have the best interests of the Australian people like Mr Wilson
7 does Jonus and I applaud him and his team. Without them all Australians would continue to get screwed.

Perhaps the financial planning industry should set up an entity and that entity can provide "services" i,e "consulting" to various super funds..... oh wait the FPA does that now. One could argue the FPA getting payments via the Professional Partner Program and signing up bulk members from a Hesta Call centre is the exact same thing.

Yogi your line of argument is non sensical.

Should the ALP refuse to accept this money? Should industry associations, unions, etc be banned from making political donations? The retail funds aren't perfect, but at least people can choose to leave. Many people are still locked into having super go to industry funds under awards.

The flow of money has been the other way. People are choosing to leave the retail funds and putting their superannuation contributions into industry funds. They probably wouldn't if the retail funds had lower fees and better performance.To give some retail funds their due, they have been cutting their fees, but the fees are still comparatively high when compared to fees charged by similar companies in other countries (see Productivity Council).

bup bummm....Wrong again Hedware. Look forward not back. How's your sponsorship going with the ISA anyway?? Or are you just salaried?

ISA is the biggest Rort alive in Australia.
Thug Unionist dressed in Spivvy suits smiling all the way whilst ripping massive profits out of Industry Super.
The Super Fund makes no profit as All Profits are Siphoned off to related companies.
These companies are owned and run by Industry Super bosses and Unions.
There are bucket loads of profits made from Industry Super, just follow the ownership of providers and massive conflicts of Interest.
APRA happily turns a blind eye to their best buddies at Industry Super. What there is never anything to report bad on Industry Super.

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