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Is APRA now the fox in industry funds hen-house?

Mike Taylor11 October 2023
Revealed rubber stamp

ANALYSIS

The Australian Prudential Regulation Authority (APRA) has given industry superannuation fund trustees and executives plenty to think about with its proposals to publish details of how, precisely, they spend their members’ money.

For years, financial advisers and others have queried the validity of the manner in which industry funds have, via Industry Super Australia (ISA), funded major television advertising campaigns such as “compare the pair” and “fox in the henhouse”.

Questions have been asked in Parliament and other forums but, by and large, no breaches of the sole purpose test or other regulations were seen to have occurred.

The legislative and regulatory backdrop changed as the Labor Government moved forward on some measure originated by the former Morrison Coalition Govenrment.

Yesterday, however, APRA sent superannuation funds a letter which proposes to make the scale and value of those expenditures more visible.

What is more, the proposal would traverse superannuation fund financial relationships with trade unions and political parties.

In a summary of proposals attaching to that letter, APRA states:

APRA proposes to publish total expenses with the name of each payee/service provider for:

  • Promotion, Marketing & Sponsorship expenses.
  • All expenses with Industrial Bodies.
  • All expenses with Related Parties.
  • Total director and other executive remuneration expenses.
  • Political Donations.

APRA proposes to include classifications to enable identification of any double counting across the proposed publication tables.

Under the heading of “Benefits of transparency”, the APRA letter then references:

“This data is required to be publicly disclosed under the Annual Member Meeting Notice, and there is a strong public interest in having this data published in a central location for ease of use.”

“Due to the strong public interest in marketing related expense, APRA has also included separately identified internal marketing expenses in the proposed publication.”

APRA’s consultation will run through industry roundtables to be held later this month and with the receipt of submissions until 29 November, before the regulator releases a response paper and confidentiality determinations in March, next year.

However, it will be brave superannuation funds which argue against transparency when everyone knows they are dealing with other people’s money.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Anon
4 months ago

The real fox in the “Industry Fund” hen house is, and always has been, unions.

APRA is the incompetent farmer who has slept through years of pillage and is finally waking up.

Won't Happen, Bet Ya
4 months ago
Reply to  Anon

Don’t count ya chickens yet.
Guarantee Industry Super, Unions & Labor fight this to the death.
And APRA will most likely water down any info or disclosure in classic REGULATORY CAPTURE CORRUPTION.
ASIC, APRA AND INDUSTRY SUPER FUNDS are the perfect example of REGULATORY CAPTURE CORRUPTION !!!!!!!!

Pro Industry fund unlisted property Ponzi schemes
4 months ago

ACCC should have stopped money sharing all together with these industry funds they are all competing again’t each other…. anti competitive behavior think about it. it is industry funds pooling money together to advertise against other retail super funds to limit competition. They have used cherry picked data to suit their narrative and also used the wrong terms like average vs median

Conclusion. If the data you are comparing is mostly uniform then you can safely use the average (AVG) aggregator. However, if your number set has some outliers then you need to consider using median (MED) to filter out the values that are skewing the results.

compare the pair ads from Industry funds used a data set of 17 of their funds used against 176 other super funds.

Not to mention the fact the regulators have been asleep at the wheel on unlisted assets and turns out the super funds can just make up their own rules around values. this has major dangers of becoming a hybrid ponzi scheme for the other investors