No ‘zero failure tolerance’ says APRA on super
![Businessman with his head in the sand](https://financialnewswire.com.au/wp-content/uploads/retail-funds-trying-to-hide-their-high-fee-histories-min.jpg)
Recent legislative changes have exposed superannuation fund trustees to heightened insolvency risk, according to the Australian Prudential Regulation Authority (APRA).
But the regulator insists it is up to the superannuation funds themselves, not APRA, to deal with those heightened risks.
Answering questions on notice from the House of Representatives Standing Committee on Economics, APRA made clear that it was not in the business of preventing failures on the part of superannuation funds.
The regulator said it was focused on system wide risk for the superannuation industry and that “recent legislative changes have extended the range of penalties to which trustees are susceptible, heightening insolvency risk”.
“APRA does not have a ‘zero failure’ tolerance. It is not APRA’s position that it should protect trustees in all circumstances but disorderly failure is not consistent with APRA’s mandate in order to protect beneficiaries and financial system stability.,” it said.
“It is up to individual trustees to review their business operations and implement better practices where necessary. Importantly, all trustee actions must be undertaken consistent with the obligation to act in the best financial interests of beneficiaries and in compliance with the sole purpose test.”
Asked by the chairman of the Economics Committee, NSW Liberal back-bencher, Jason Falinski why it had not issued a discussion paper ahead of the changes, APRA said that changes to the prudential framework could not be determined or implemented prior to industry responses being sought and considered.
“The recently released discussion paper is looking at financial resilience more broadly to ensure financial resilience is considered holistically,” it said. “APRA is required to undertake changes to the prudential framework in a manner consistent with the Australian Government’s Impact Analysis Framework.”
ASIC must have been too busy banning a private financial planner for leaving a coffee cup stain on a copy…
Compare the pair.
The top of the Dixon hierarchy are the ones that need to be exposed and prosecuted.
If rates on mortgages continue to climb and I like many others think they will then these tax cuts pale…
The rats are now scuttling to get out of the kitchen now they have been exposed ! Who us never…