The Association of Superannuation Funds of Australia (ASFA) has told the Federal Government that regulation of the superannuation industry is likely to have become easier in the wake changes such as trustee licensing, which has given rise to fewer but larger funds.
In a submission to the Treasury responding to the Financial Sector Levies Discussion Paper, ASFA chief executive Philippa Smith said ASFA believed the existence of fewer, bigger and better run superannuation funds would reduce the aggregate amount of supervisory activity.
“The risk profile of the superannuation sector was arguably weaker when there were more, smaller and geographically dispersed superannuation funds prior to trustee licensing,” the submission said.
Smith also used the submission to question an assumption in the discussion paper that the Australian Prudential Regulation Authority would need to engage in more intensive interaction with auditors and actuaries.
“It rather defeats the purpose of having trustee risk management statements being audited and expert actuarial advice being received if APRA revisits all, or most, of the same territory covered in these activities,” the submission said.
The ASFA submission also questions an assertion in the discussion paper that the outsourcing of material business activities, such as administration, investment management, clearing house services and custody of fund assets to third party providers, is expected to become more widespread, requiring additional resources for APRA.
“ASFA is not aware of any survey or other evidence to support this assertion,” it said.
