Compare the regulatory pair – APRA then and now
ANALYSIS
More than a decade ago and well after industry superannuation funds launched and funded the “compare the pair” advertising campaign, they justified the cost by pointing to its effectiveness in retaining and attracting members and, ultimately, driving down costs.
At the time, much of the criticism of the expenditure on the advertising campaign was that it did not comply with the sole purpose test. APRA in 2015 took the view that, funded by Industry Super Australia, it could not absolutely say that it did not.
Today, APRA is looking to hold superannuation fund expenditures to a somewhat different test – the Best Financial Interest Duty (BFID).
Thus, a decade later, the regulator has now suggested that it is better practice on the part of superannuation funds if they can demonstrate “clear links between an RSE’s Strategic Objectives, including an assessment outlining the impact if the expenditure did not occur, benchmarking, and any other alternatives that have been considered”.
APRA is also suggesting that better practice will involve superannuation fund licensees demonstrating “how an increase in membership numbers through certain expenditure activities led to a reduction in fees, providing tangible evidence of improved financial outcomes for members”.
So, 10 years’ down the track, it is not enough for superannuation funds to simply assert that they are spending advertising and marketing money in the best interests of members, they have to actually provide evidence that that is, indeed, the case by pointing to tangible outcomes.
All of which might prove heartening for former Tasmanian Liberal Senator, David Bushby, who in 2015 asked the following questions of APRA:
- “Is APRA aware that the lobby group representing funds known as ‘industry funds’, Industry Super Australia, is using funds it sources from members’ accounts to finance a campaign against specific Federal Government Budget proposals relating to pensions and superannuation?”
- “Would advocacy on such policy issues be contrary to the sole purpose test of a superannuation fund under SIS, if they were being conducted by an individual fund?”
- “If so, as ISA is wholly owned by super funds and funded from levies ultimately sourced from members accounts, is such advocacy contrary to the sole purpose test applicable to the respective superannuation funds represented by ISA?”
Compare the pair. Indeed.
APRA also proving how totally Regulatory Capture Corrupted they are to best buddies Industry Super.
Compare the Regulatory pair = just the same as total Regulatory Capture Corruption.
Industry Super Funds own and run the ALP, ASIC & APRA and can do what ever they want via Industry Super Funds and as per other article multi Billions unregulated in Redundancy / whatever slush funds.
APRA, ….let’s face it..APRA can be summed up as follows…..all the “cool guys” work in the Banking regulations team, well paid and over resourced……Yet deep in a dark dungeon with no light, dwell a handful of failed dorks looking after the prudential management of Super funds. Every 40 years they put there hands up and some random press release is generated.