Fewer super funds yet APRA’s levy increases

A new Treasury discussion paper has confirmed the degree of heavy lifting being imposed on superannuation funds to pay for the regulatory activities of the Australian Prudential Regulation Authority (APRA) via the so-called “APRA levy”.

The number of superannuation funds may have been declining because of the mergers and exits being forced by APRA’s approach, but this appears to be having no impact on the quantum of the regulator’s funding levy.

While APRA is responsible for the major banks and insurance companies, the Treasury consultation document reveals that it is superannuation funds which are responsible for over 40% of the levy load with the per centage set to increase moving into 2023-24.

What is more, the Treasury document confirms that the legislative tinkering of the former Coalition Government, particularly with respect to the Your Future, Your Super regime has been costly.

The Treasury document states levies funding of $111.6 million consists of $70.1 million for APRA’s supervision of the superannuation industry; $40.6 million for costs relating to ATO, GNGB and the Treasury; and a $0.9 million prior year Non-APRA under-collection.

“This total compares to $102.5 million in 2022-23,” the Treasury document said.

It said the levy minimum had increased to $12,500 for 2023-24 while the levy maximum remained unchanged at $800,000 for 2023-24.

“Levies funding in 2023-24 represents 42.3 per cent of total levies, compared to 39.5 per cent in 2022- 23, which is driven by the recovery of prior year under-collected APRA levies, the increased time spent by APRA on the Superannuation industry due to increased supervisory and enforcement intensity, and implementation of the former Government’s Your Future, Your Super measures,” the consultation said

In doing so it said that In 2023-24, APRA’s supervisory activities in the superannuation industry “will continue to focus on holding trustees to account to improve the member outcomes they are delivering, and to actively address deficiencies in their practices ensuring all Australians are well served by the superannuation system”.

“APRA’s activities will focus on rectifying substandard industry practices such as board capabilities, tenure, management of conflicts of interest and strength of internal control systems. APRA will also focus on eradicating unacceptable product performance by continuing to make public the results of the annual performance test and MySuper and Choice Heatmaps. APRA will also review how trustees have implemented the retirement income covenant within their business strategies and operations, for the benefit of members, and ensure trustees take steps to address deficiencies where they are identified.”