Superannuation funds have renewed their expressions of concern about the lack of transparency around how the financial services regulators are spending millions of dollars in supervisory levies.
The concerns have been made clear in a submission to the Federal Treasury from the Association of Superannuation Funds of Australia (ASFA) which has pointed out that it raised similar concerns in submissions to the Financial System Inquiry (FSI).
The submission said that while pooled superannuation funds currently paid millions of dollars in levies each year to fund the regulatory process, the industry currently had very little awareness of how those levies were allocated between, and utilised by, the relevant agencies.
“The breakdown provided to the industry during the annual levy determination process is at the very highest level, simply identifying a total allocated to each agency,” the submission said. “No detail is typically provided to indicate how those amounts relate to the various activities conducted by each agency.”
“In fact, the level of information provided to the industry during the levy setting process has in fact been reduced in recent times — for example, by the omission, in the consultation papers for the 2014-15 and 2015-16 levies, of any specific funding allocation for the Superannuation Complaints Tribunal.”
The submission said the lack of transparency over levies had led to concern that the superannuation industry “might effectively be cross-subsidising other participants in the financial services industry, which are not subject to the levy regime”.
It said that due to the limited information that was made available regarding the utilisation of levies, it was not possible for industry to assess whether the regulators and agencies had delivered value for money.
“In ASFA’s view, this represents a significant shortfall in holding the regulatory process to account,” the submission said.
