APRA published its submission to the Productivity Commission's draft report examining the efficiency and competitiveness of superannuation system in Australia. The Productivity Commission has acknowledged the importance of superannuation system in Australia and the substantial value that has been, and continues to be, delivered to fund members.
APRA welcomed the draft report and agrees with a number of the Productivity Commission findings and the direction of many, but not all, of the recommendations in the draft report. The APRA submission sets out the perspective of APRA on the following key areas addressed in the draft report:
- Activities of APRA related to member outcomes
- Management of implementation
- Role of APRA and the regulatory architecture
- Improving the quality of superannuation data
APRA is supportive of the focus placed by the Productivity Commission on member outcomes, which aligns closely with the current strategy of APRA for the superannuation industry. The superannuation prudential framework of APRA is less mature, compared to the other industries that APRA regulates. The industry has made substantial progress in implementing the new prudential standards over the last five years, which has translated into improved industry practices. However, the progress is somewhat variable, with some trustees making significant strides toward better practice and others showing (in some cases considerable) room for improvement. Similarly, the quality of the outcomes being provided for members varies widely across the industry. While the regulatory framework has been improved by recent legislative reforms, the continued absence of critical powers in superannuation for APRA inhibits its ability to take timely and proactive action.
Keywords: Asia Pacific, Australia, Banking, Insurance, Securities, Superannuation, Prudential Framework, Post-Implementation Review, Productivity Commission, APRA
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