The superannuation industry is experiencing increasing structural change warranting closer attention on the part of the Australian Prudential Regulation Authority (APRA).
APRA has used its annual report tabled in Parliament to point to the gradual decline in net contributions reflecting Australia’s ageing population.
“This reflects Australia’s ageing population and the maturing of the superannuation system, as a growing number of members reach retirement age and begin to draw down on superannuation assets,” the regulator’s annual report said.
“This is slowly removing one of the superannuation industry’s two primary sources of growth [positive net contributions] and poses a structural challenge to funds’ ability to maintain and gain scale,” it said.
The two funds have announced the signing of a non-binding MOU to explore a potential merger.
The board must shift its focus from managing inflation to stimulating the economy with the trimmed mean inflation figure edging closer to the 2.5 per cent target, economists have said.
ASIC chair Joe Longo says superannuation trustees must do more to protect members from misconduct and high-risk schemes.
Super fund mergers are rising, but poor planning during successor fund transfers has left members and employers exposed to serious risks.