The Australian Prudential Regulatory Authority (APRA) is responsible for supervising Australia’s financial system and while the focus since the GFC has naturally been on banks, bank risk and bank balance sheets, they have just delivered a wake-up call to Australia’s $1.7 trillion superannuation industry.
The Financial Review reports this morning that: “The prudential regulator is cracking down on superannuation fund trustees after declaring retirement scheme boards are less professional than those in the banking and insurance sectors.”
In a frank and somewhat startling revelation, APRA’s head of superannuation regulation, Helen Rowell, told the AFR that:
The average level of professionalism and soundness in the super industry is somewhat behind…
The gap is probably wider. There are more [super funds] with average to poor practices
The board, or trustee, focus on superannuation by APRA is the road that APRA has been travelling with Australia’s banks, credit unions and building societies over the past few years.
Rowell told the AFR: “We certainly think that having independent directors adds value. We would harmonise the prudential standards [between the sectors APRA regulates].”