APRA flags use of enforcement powers on super expenditures

Superannuation funds have been placed on notice by the Australian Prudential Regulation Authority (APRA) that it will be leveraging new, more granular expenses data to examine their expenditures.

At the same time as parliamentarians have ramped up pressure and questioning over money flows between superannuation funds and trade unions, APRA has used its latest corporate plan to signal that it is prepared to act, including using its enforcement powers if necessary.

The regulator listed its approach as one of its priorities in its 2024-25 corporate plan, made public yesterday.

APRA said it would focus on adherence to the enhanced Prudential Standard SPS 515 Strategic Planning and Member Outcomes (SPS 515) to promote strong member outcomes.

“APRA will utilise the new granular expense data set to identify trustees with outlying expenditure for certain discretionary expense categories and will intensify supervisory efforts accordingly, recognising that the use of the enforcement powers may be appropriate in certain circumstances,” it said.

APRA also said that it would continue to improve industry transparency with the inaugural publication of fund level expense data.

“APRA will monitor trustees responsible for underperforming choice products to ensure they are taking steps to improve or exit them,” it said.

The APRA response appears to reflect the focus directed to it by members of the Senate Economics References Committee particularly the relationship between the Construction, Forestry and Maritime Employees Union and major industry fund, Cbus.

Publication of the APRA Corporate Plan also comes as the regulator awaits the outcome of a judicial review of its decision to impose license conditions on Queensland-based fund, BUSSQ.