Having succeeded in reducing the number of superannuation fund trustees in Australia by more than two-thirds, the Australian Prudential Regulation Authority (APRA) is now seeking to impose higher fees and charges on those funds remaining under its regulatory control.
APRA confirmed in early July that, following the trustee licensing exercise, the number of trustee entities remaining under its jurisdiction numbered 307, with 325 applications having been received, 17 having been withdrawn and one being rejected because it did not meet the criteria.
The chief executive of the Association of Superannuation Funds of Australia (ASFA), , has confirmed that superannuation funds have been facing hefty increases in the levies they are obliged to pay APRA to help fund the regulator’s activities.
She said the original formula pursued by APRA would have seen a doubling in fees paid by some superannuation funds — something that had been resisted by the industry and was now under review.
“Their [APRA’s] preferred model would have seen a 100 per cent rise, but after some discussion I believe that is being reduced,” she said.
“It really does raise questions about the costs and benefits of regulation,” Smith said.
Super Review understands the formula being used by APRA to levy fees from superannuation funds based on funds under management means the largest entities, such as REST and the newly merged / entity, will be facing some of the highest increases.
The chief executive of Tasmanian-based Tasplan, , said the level of fees being exacted by APRA was an ongoing issue and something that needed to be reviewed.
Both he and Smith said that in circumstances where a large number of funds had exited the industry, the cost of regulation was being divided across a smaller number of funds.
“Clearly, this is not sustainable, even using three-year averaging, and needs to be reviewed,” Smith said.
Chief executive of acknowledged the hefty slug being imposed on funds, but said it was important that members understood that Australia had the highest possible levels of prudential regulation.
However, he said he believed that a disproportionate load was being carried by larger funds.
