The flow of moneys from superannuation funds to other entities is likely to be made more transparent and placed under greater scrutiny as a result of legislative amendments being proposed by the Federal Government and backed by the Australian Prudential Regulation Authority (APRA).
At the same time as critics of the industry funds point to their sporting sponsorships and their relationships with the trade union movement, APRA has told the Productivity Commission (PC) that proposals to enable it to collect more data around the non-investment expenses of superannuation funds will give it greater visibility.
“APRA welcomes the Government’s proposal to enable APRA to collect more comprehensive data relating to non-investment expenses incurred by RSEs [superannuation funds] and RSE licensees by amending the Financial Sector (Collection of Data) Act 2001,” the submission said.
“The proposed amendment would enable APRA to require RSE licensees to provide information on a look-through basis in relation to transactions between an RSE licensee and another entity,” the submission said. “APRA expects that this would enable the collection of more detailed information on transactions between RSE licensees and other entities, and provide additional transparency on the ultimate purpose and destination of payments from the RSE than is currently available.”
It said the collection and publication of more comparable and detailed data in this area would provide additional accountability for trustee decision-making in relation to expenditure and also support more robust assessment of the delivery of member outcomes,” the regulator’s submission said.
It said APRA would begin consultation with industry and other interested stakeholders in the near future, “to explore how APRA’s reporting collection could be amended to address the limitations noted above by facilitating for more consistent categorisation of RSE licensee and fund level expenditure in a manner that does not impose undue compliance costs for the industry”.
“The development of these reporting framework proposals will also be informed by the findings of APRA’s thematic review into related party arrangements across the superannuation industry, which is close to finalisation. APRA intends to release the results of this review in the near future,” the submission said.