APRA came under fire from speakers at the Investment Administration Conference for the cost and impractical nature of much of the compliance with new regulation.
On a panel session on the subject of Stronger Super held in Sydney on February 12, APRA general manager Greg Brunner, heard of the stress that compliance was causing for funds and for custodians.
Pauline Vamos, chief executive of the Association of Superannuation Funds Australia, said she felt too much data collection was taking place without a full cost benefit analysis.
She said unnecessary costs had been incurred and that APRA had too often adopted what she felt to be a “lets see how we go” approach.
Louise du pre Alba, head of policy and public affairs at AustralianSuper, while not directly criticising APRA, gave a detailed account of the cost, time and legal burdens imposed by Stronger Super compliance.
She listed 20,000 employee hours of work and 97 training workshops for its staff and emphasised how this “significant amount of capital expense and effort” was the same for a large fund such as AustralianSuper as that for a smaller fund.
She added there was an increased risk of trustees being sued. She said that standards for trustees of super funds were now equal or above to that of a professional trustee.
David Braga, chair of the Australian Custodial Services Association, spoke of the difficulty in meeting quarterly reporting requirements within a 28 day time frame. He said this time pressure was posing the risk of putting out errors which could end up misinforming the public.
Brunner, in APRA’s defence, spoke of the difficulty in getting sufficient feedback from the industry, in particular on the cost of regulation.
“It is hard to get people engaged with the regulation, so many things have been happening at the same time and that is part of the problem. We have had a relatively disappointing number of people turn up for roadshows and we receive very poor information from the industry about the cost. Once we get that information it will enable us to do regulation better.”