Diversa’s third-party trustee model questioned

The Australian Prudential Regulation Authority (APRA) has said it will act promptly in instances where members of superannuation funds seek a change in third party trustees.

In a direct reference to reports of a lucrative bonus paid to the chief executive of Diversa, Tasmanian Green Senator, Nick McKim suggested that problems seemed to be concentrated in the “third party trustee market” where trustees provide services to multiple funds.

“Is there any action which APRA is taking to work with fund sponsors or promoters to support their exit from that model of trustee governance,” he asked.

APRA deputy chair, Margaret Cole said that the regulator was agnostic as to particular models “so long as they work properly and protect the interests of members”.

She said she believed that the work APRA is doing on platforms is getting to the point where the regulator will be doing specific engagement and would allow APRA to drill down on specific trustees.

APRA executive, Carmen Beverley-Smith said that based on the regulator’s interactions with individual trustees it would be able to assess the level of governance the entities were providing to funds.

On the question of reports that Diversa Trustees chief executive, Andrew Peterson had been paid a substantial bonus, APRA’s Cole said that the issue related to the Financial Accountability Regime (FAR) which had now been extended to the superannuation sector.

However, she pointed out that the FAR arrangements were not retrospective.