The Financial Regulator Assessment Authority (FRAA) has released its review of the Australian Prudential Regulation Authority (APRA).
The review recognised APRA’s key role in maintaining financial safety and system stability for the benefit of the community and its important contribution to Australia’s world-leading financial system.
It also found APRA’s supervision of superannuation is “effective and capable” but its resolution function is less developed, which matched with APRA’s self-assessment.
The five FRAA recommendations which aim to strengthen risk identification in the superannuation industry, continued development of capabilities and expertise of APRA’s people, investment in data and technology, enhancing transparency to maximise the impact of APRA’s outcomes, and lifting recovery planning and resolution readiness.
The recommendations are:
APRA chair, John Lonsdale, said: “APRA welcomes the FRAA’s review of APRA’s superannuation capabilities. The recommendations provide helpful guidance and reinforcement for a more effective APRA into the future.
“APRA will continue to build on its strong foundation of safeguarding the financial wellbeing of the Australian community by further strengthening prudential frameworks and improving capability to drive better industry practices in superannuation for the benefit of members."
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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