ASIC will monitor boasts by funds that passed the performance test
The Australian Prudential Regulation Authority (APRA) has made clear that superannuation funds which received a ‘fail’ in its performance test will now have to come up with remediation and contingency plans.
At the same time, the Australian Securities and Investments Commission (ASIC) has signalled that it will not only be monitoring the communications of ‘failed’ funds to their members, but those of funds which passed the performance test.
ASIC senior leader, superannuation, Jane Eccles said that the regulator would be examining whether the claims made by superannuation funds which passed the performance test were reasonable.
APRA executive, Katrina Ellis told a conference of industry superannuation participants, the Australian Institute of Superannuation Trustees (AIST) ASI 2021, that the performance test and the issuing of ‘fail’ notices had represented the drawing of a line in the sand with respect to superannuation fund investment performance and costs.
She said the objective of demanding the remediation and contingency plans was to ensure that the affected superannuation funds could validate how they were going to fix the problems which had resulted in them receiving a ‘fail’ assessment.
She said that the regulator would need to be convinced by these funds that, if they were to remain in the sector, they had appropriate strategies in place for overcoming their shortcomings.
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