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