No explicit rules on super fund anniversary events says APRA

The Australian Prudential Regulation Authority (APRA) has no fixed position on superannuation funds spending money on events such as fund anniversaries.

Specifically asked about big construction industry fund Cbus spending $387,000 to celebrate its achievements over 40 years, APRA said “there are no explicit rulings or rules which specify whether expenditure relating to anniversary events is or is not in members best financial interests”.

APRA had been asked by NSW Liberal Senator, Andrew Bragg, about the Cbus expenditure and asked, “what is the normal expectation on expenditure for an anniversary event?”

He also asked whether it satisfied the best financial interest duty.

“Could you provide a ruling on the 40th birthday event that was recently held by Cbus? o Have you asked Cbus to justify the $387,000 cost of their 40th birthday party?

“Are you aware of any other super funds having had birthday parties/events for their funds, and if so, do these meet BFID standards?” Bragg asked.

APRA pointed to Superannuation Industry (Supervision) Act and its Prudential Standard SPS 515 aimed at ensuring expenditure decisions are consistent with the best financial interests of members.

“APRA’s guidance makes clear that we expect trustees to have appropriate expenditure management processes and frameworks in place to support rigorous assessment of expenditure,” its formal answer to Bragg said.

“BFID is concerned with whether a trustee’s decision is reasonably justifiable considering the circumstances that existed at the time of the decision. BFID does not specify acceptable types or circumstances where expenditure would be considered in members best interests, with the onus of this assessment being on the trustee.”

“As a result, APRA can confirm there are no explicit rulings or rules which specify whether expenditure relating to anniversary events is or is not in members best financial interests.”