APRA to lift the lid on super fund expenses

Following an industry consultation last year, the Australian Prudential Regulation Authority (APRA) has announced further transparency is on the cards regarding how members’ funds are spent and invested by trustees.

From August 2024, the regulator will publish new expenditure data that will provide details on the breakdown of expenses for the whole industry and, for each fund, more detailed categories such as director remuneration, administration, and recipients of payments made by each fund to industrial bodies in relation to promotion, marketing, or sponsorship expenses and any political donations.

APRA will also publish further details on the type of investments the industry holds in relation to property and infrastructure, alternative strategy funds, listed equity, and private equity.

The move followed a consultation with industry in 2023, in which APRA sought feedback on proposals to treat most of the data it now collects on fund expenses and detailed asset allocation information as ‘non-confidential’.

VIEW ALL

View all

APRA deputy chair Margaret Cole said the new data will shed further light on how trustees are spending and investing the funds entrusted to them by members.

“I am pleased to acknowledge that the industry has been broadly supportive of APRA’s proposals to provide greater transparency on the use of member funds,” Cole said.

“Through our Superannuation Data Transformation project, APRA will continue to expand the breadth, depth and quality of our data on superannuation, and to publish as much of this data as possible.”

According to APRA, submissions to the consultation were “generally supportive” of the publication and confidentiality proposals.

However, some concerns were raised across the categories around consistency, comparability, and context with regard to the expense data.  

Payments to industrial bodies like unions by super funds have been an ongoing matter of discussion, with APRA confirming last year that it is investigating the issue.

Some of these payments related to payments for directors’ fees as union representatives sat on industry fund boards, but other payments were significantly higher than these fees.

Appearing before the Senate estimates in June 2023, Cole confirmed to Liberal senator Andrew Bragg that there would be a formal investigation that would review donation data from the Australian Electoral Commission (AEC).

In a statement after the session, Bragg said $13 million had been sent from super funds to unions in the 2020–21 financial year. This was up from $11 million in the previous year.

Senator Bragg said: “These payments are not solely for ‘directors fees’. This is an illegal scheme designed to siphon retirement savings from super funds to the unions. The lack of enforcement action has become a joke.”