Trustees are being swamped with information from fund managers, says the Australian Prudential Regulatory Authority (APRA), which has called for more streamlined reporting to help.
Greg Brunner, general manager APRA, told delegates at the 17th annual Investment Administration Conference in Sydney that fund managers should be helping trustees cope with the increased compliance they were now facing.
“Boards are being swamped with material now. Fund managers say ‘here it all is we will just download the information to your iPad’. Instead they need to think about what is relevant for trustees.”
Brunner also revealed APRAs intentions for the data it is collecting from superannuation funds.
It will publish a regular PDF of high level data on asset allocation, fees and returns, but there will also be a database which researchers can mine for data searches.
“The expectation is that people would register as a user for the database and they can go in and use it as they wish,” he said.
APRA is currently consulting on how much information will be publicly available and what sensitive data will be held privately.
One of the stumbling blocks to achieving this transparency is the practicality of new quarterly reporting. Brunner saw this process being refined to make it easier for all.
“The first quarterly reports went reasonably well, but there were some glitches. There will be a need to tweak the reporting standards to make that go more smoothly.”
Brunner also spoke more broadly on the standards he expected from trustees. He said APRA was not convinced trustees had caught up with the new skill sets of Stronger Super and that it would be adopting a “tougher approach” going forward.
This approach was partly a recognition that funds had now been given enough time to put StrongerSuper regulation into force.
“Up until now, there has been a forbearance, but that is coming to an end,” he said. “We will be looking for much greater compliance with the frameworks we have put in place.”
He added that APRA would be conducting two thematic reviews in 2014. One would be on the processes funds used to hire and monitor insurers. This would have a focus on the sustainability of premium rates in the current climate of increasing member claims for group insurance benefits.
A second thematic review will explore trustee conflicts of interest. This would take a sceptical look at those who held trustee roles across several funds. It will look for boards to show they are creating registers of their conflicts of interest and it will explore the largest transactions funds enter into for any conflicts too.