The Australian Prudential Regulatory Authority (APRA) will be ready for the 1 July 2013 start of the government’s planned MySuper legislation, an official from the prudential regulator told a Parliamentary Joint Committee (PJC) hearing last week.
PJC chair Bernie Ripoll asked APRA executive general manager diversified institutions division Keith Chapman to comment on concerns over the regulator’s ability to meeting the 1 July 2013 start date of MySuper.
“All I can really say is we are working within the timeframe,” Chapman said.
“We do want to have all the prudential standards finalised by the end of the year. Every timeframe imposes constraints. We’ve done a lot of planning around and we’re confident that we can do as good a job as possible within that timeframe.”
Asked whether he expected the applications to be spread out, Chapman said he was confident that not everyone would turn up on the first day.
“The biggest [possibility] is some trustees will be laggards in the process,” he told the hearing.
“We are going to date-stamp and number each one as it comes in,” he said, adding APRA had 120 to 130 frontline supervisors to process the MySuper applications.
“It’s not a one-person funnel,” he said, adding draft applications could be submitted later this year.
“We’re encouraging draft applications in the second half of 2012. We’re actually going to work on doing the applications better once we get them.”
In the day-long hearing, the bulk of concerns expressed were around Superannuation Legislation Amendment (MySuper Core Provisions) Bill 2011 section 29TB, which centres around MySuper products sponsored by large employers.
“While we support the MySuper policy, we highlighted in our submission on the primary Bill one major outstanding provision which we are unable to support,” Financial Services Council senior policy manager Andrew Bragg told the hearing.
“Section 29TB as drafted will remove competition, introduces cost and inserts the prudential regulator as a commercial arbiter,” Bragg said.
“It requires APRA to approve commercial tenders where the price is determined by the market – this is not the role of our prudential regulator.”
APRA plans to release guidelines for MySuper applications in May, a senior policy manager for the regulator told a parliamentary hearing last week.
APRA senior manager for policy development, policy, research and statistics Katrina Ellis told the hearing the regulator’s planned consultation paper would include a number of elements.
The paper would include a draft MySuper application form, guidelines for the form and prudential standards around the requirements for 1 July 2017, the date by which accrued default balances must be moved into MySuper.
