Room for improvement at APRA

The Australian Prudential Regulation Authority (APRA) has room for improvement in managing the prudential supervision of superannuation funds, according to the Australian National Audit Office (ANAO).

In an audit report tabled in Parliament last week, the ANAO found that there was scope for APRA to improve its management of supervision activities, to support superannuation entities to better manage prudential risks on behalf of beneficiaries.

It pointed to variations in the treatment meted out to superannuation funds, noting that "in recent years, similar superannuation entities have received varying levels of supervision and higher risk entities have not consistently been subject to more intense supervision".

While giving APRA a relatively clean bill of health, the ANAO noted that while undertaking a substantial number of supervisory activities that have made many proposals for improved performance by superannuation trustees, "APRA has not managed supervisory activities for the superannuation industry as effectively as it could have".

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"The ANAO's analysis of 50 electronic trustee files found that only four per cent of the actions proposed in prudential reviews were recorded in APRA's issues management system, which has limited APRA's ability to monitor entities' responses to outcomes and analyse trends from this information in its industry risk analysis," the audit report said.

"Further, more than half of the superannuation supervision activities completed by APRA from 1 July 2013 to 24 March 2016 were overdue and a large proportion of prudential reviews examined by the ANAO were not recorded electronically in line with internal guidance," it said.

"While few in number, APRA has not routinely reviewed its supervision of entities subject to enforcement action to identify opportunities to improve its broader supervision approaches."