The Federal Treasury has strongly defended giving the Australian Prudential Regulation Authority (APRA) powers to make regulations around the independence of superannuation fund trustees under the Government’s proposed changes to super fund governance arrangements.
Answering questions on notice file in the Parliament last month, the Treasury has sought to defuse suggestions that the Government’s Superannuation Legislation Amendment (Trustee Governance) Bill 2015 steps outside the norm in granting such powers to APRA and has pointed to the regulator having similar powers with respect to banks and insurers.
“The proposed regulatory changes are designed to complement the existing prudential framework to ensure that the governance of the superannuation industry reflects the growing importance of superannuation in the broader Australian economy,” the Treasury response said.
“The powers in the Bill for APRA to determine a person independent or not independent, reflect the practical reality that it is not possible to clearly address in the legislation all situations that may arise in practice; it is essential that APRA is able to respond to unusual circumstances to provide the necessary certainty to industry,” it said.
“APRA has powers, in relation to the other regulated industries, to issue a direction relating to the appointment and removal of directors,” the Treasury response said.
The response suggested the empowerment of APRA was necessary to address possible structures or relationships that might emerge in the superannuation industry over time.
“Having a regulation making power will enable the Government to provide certainty to the industry in situations where it is clear a group of directors are independent and remove the need for industry to seek a determination by APRA in these situations,” the Treasury response said.
