Given that the Australian Prudential Regulation Authority (APRA) is currently in the courts seeking to prosecute IOOF over the manner in which it used a member reserve, Rollover was a little startled by the regulator’s view on the use of reserves by super funds feeling the pinch from the Government’s changes to insurance inside superannuation.
Of course, as everyone knows, superannuation funds will not be able to extract insurance premiums from member accounts with balances less than $6,000, something which will have significant impacts on the fees charged by those funds.
So how does APRA propose they deal with the situation – by raising fees or accessing the reserve. Hello?
This is how APRA put it:
“The introduction of the fee cap may, for some RSE licensees, require some costs that were previously borne by members with balances less than $6,000 to be recovered through other avenues.
“In this regard, APRA would expect that RSE licensees would recover these costs in a manner that is in accordance with its duties to members, whether that is by making changes to fee structures or via (in the short term) the use of an appropriate reserve. That requires having regard to the best interests of its members, prioritising its duties to and the interests of members, and treating members fairly within and between classes of beneficiaries.”
At time of writing the IOOF litigation continued.
