But what do the regulators do?
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- Published: Tuesday, 28 August 2018 15:00
The Australian Prudential Regulation Authority is charged with the responsibility of regulating superannuation funds and ensuring their compliance with the Superannuation Industry Supervision Act 1993.
As I’ve spent 16 years as a director on the LGS Board from its inception in 1997 to 2013, I’ve enjoyed a good relationship with APRA and what can be their personal views pushed as government policy, or the “house view” of the regulator. To an extent, that relationship continues. depa is one of the shareholders of LGS Proprietary Limited.
In recent years APRA has published their own assumptions about the benefits which flow to industry superannuation funds by including purportedly “independent” directors on the board to complement the normal “equal representational model” of equal numbers of employers and employees. They regard it as best practice even though there is no evidence yet published to support that view.
It’s hard to talk about the regulator when every meeting or discussion begins with their disclaimer. Not a financial disclaimer about all the risks you take in dealing with them, but a reminder that so much of what they do, and so often spoken of only in a general and non-specific sense because that’s how you get the best responses, is subject to section 56 of the Australian Prudential Regulation Authority Act 1998 “Secrecy-general obligations”.
This section provides a series of offences which involve criminal penalties including imprisonment for up to two years. Not for me the risks of the showers, thanks!
And it is a strange irony that the SIS Act requires “a general flavour of disclosure” by superannuation funds supervised by it. When a fund’s commitment to disclose clashes with a regulator’s potential restrictions on confidentiality, and is fraught with risk of imprisonment, it’s hard to disclose and be transparent on things members have a right to know about. Or to know what can be said and can’t be said, and the reason why.
So, say no more, as they say, maybe next issue...