APRA now empowered to remove super directors

The Australian Prudential Regulation Authority (APRA) now has the power to disqualify superannuation fund directors and executives.

The regulator has faced Parliamentary committee questioning over its ability to act against superannuation fund trustees and executives and has acknowledge that, in the last five years, it has never removed a director from a superannuation fund.

It said that its ability to remove directors from a superannuation trustee board had been limited but that situation had changed effective from Friday, last week.

Under questioning during Senate Estimates from NSW Liberal Senator, Andrew Bragg, about how many directors had been removed in the past five years, APRA responded none, before adding: “however, APRA has commenced proceedings in the Federal Court of Australia seeking civil penalties and the disqualification of First Super Pty Ltd director and co-chair Michael O’Connor”.

It then said it needed to be noted “that APRA’s powers to remove a director from a trustee board are limited to:

• Making an application to the Federal Court to seek orders for a disqualification of a director. This requires APRA to prove that an individual contravened a provision of an Act administered by APRA and that the contravention is sufficiently serious to warrant disqualification; and
• directing a trustee to remove an individual from the board, which requires us to establish (relevantly) that the trustee has contravened the law or that the direction is necessary in the interests of beneficiaries of the fund.

The regulator then said that from 15 March 2025, “APRA will have the power to disqualify individuals from acting as accountable persons for superannuation trustees if it is satisfied that the individual breached their accountability obligations under the Financial Accountability Regime and the disqualification is justified having regard to the seriousness of the failure to comply”.

Bragg had framed his Senate Estimates questions around the status of Cbus chair, Wayne Swan, given that he is also national president of the Australian Labor Party (ALP).

The Senator asked whether APRA had considered whether or not this gave rise to “a conflict of interest under the responsible person and fit and proper person test”.