Regulators tell super CEOs to plan for contingencies

The corporate and prudential regulator have told superannuation chief executives that trustees looking to charge a fee to help strengthening its financial resilience should plan for contingencies if a court decision is not favourable.

The Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) held a roundtable with 11 CEOs that focused on APRA’s discussion paper on strengthening financial resilience in super.

The CEOs noted common focus areas to enable adequate financial resources included strengthening controls and frameworks, use of insurance, capital and support from a resourced parent company.

“The purpose and use of the operational risk financial requirement (ORFR) was raised throughout the discussion, with CEOs expressing a desire for these requirements to be reviewed,” APRA said.

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“APRA encouraged submissions to the discussion paper, noting this would inform APRA’s next steps.”

The regulators also outlined the need for high quality data to support a well-functioning super system in Australia and the need for trustees to focus on, and improve, data governance evidenced by unacceptable recent regulatory data resubmissions by a range of trustees.

APRA said the CEOs acknowledged the need to invest in data governance in a continually evolving landscape, and shared common data challenges including; access to accurate and timely data from third parties and the need to industrialise and professionalise internal reporting functions to ensure that data is accurately reflected.

“Some CEOs expressed an interest in applying key learnings regarding data management practices from other industries and requested insight into changes in future regulatory data collection requirements be provided as early as possible, noting that in some instances these changes are part of legislative reform rather than requirements from APRA and ASIC,” it said.