The Australian Prudential Regulation Authority (APRA) has reviewed thousands of documents from 14 superannuation funds as it intensifies scrutiny of expenditure that is higher than average or provides no benefits for members.
APRA said it sought information from Registrable Superannuation Entity (RSE) licensees of varying scale and business models where it noticed comparatively higher levels of expenditure or where the member benefit was not immediately apparent.
It said the documents related to discretionary expenditures like travel, entertainment and conferences, marketing and spending with entities connected by close financial, managerial or operational relationships.
These details are in a letter that APRA has released to RSE licensees, which are the entities licensed to operate super funds, as it continues to focus on ensuring funds comply with their legal duties and achieve better outcomes for members.
“Where APRA has identified opportunities for individual RSE licensees to improve practices, APRA has communicated this directly to these RSE licensees and will continue to monitor as part of ongoing supervision” APRA said.
APRA warned licensees in October 2024 that it would be intensifying scrutiny of questionable spending or deficient spending practices.
APRA’s updated Superannuation Prudential Standard (SPS) 515, which applies from July, noted it was ‘better practice’ for RSE licensees to obtain an attestation from accountable senior executive management on expenditure management.
“Where APRA identifies practices that fall short of legal requirements, APRA will utilise the full range of its powers to hold an RSE licensee accountable,” the regulator said in the letter.
APRA said members’ retirement balances were inherently shaped by the stewardship, governance and decision-making of their RSE licensees.
As their expenditure decisions may have a lasting impact on members’ retirement outcomes, it was therefore crucial they were made with a clear and demonstrable focus on members.
